Harvard Business Review LogoChoosing a clear organizing principle can help companies navigate uncertainty and act faster. by Rita McGrathField Kallop; Deity, 2024; courtesy of the artist and Voltz Clarke GalleryIn a dematerializing economy—where value has shifted from physical assets to intangibles such as data, software, and capabilities—traditional strategy frameworks no longer provideImagine you are sitting on the capital allocation committee of a major company that is in the eye care, consumer healthcare products, generic drug, and pharmaceutical businesses. Two proposals are on the table. The first is a multibillion-dollar request to build a next-generation production facility for consumer health products, such as over-the-counter painkillers. The investment case is straightforward: stable demand, predictable margins, and a well-understood manufacturing process.A version of this article appeared in the July–August 2026 issue of Harvard Business Review.
The Power of Strategic Centering
In a dematerializing economy—where value has shifted from physical assets to intangibles such as data, software, and capabilities—traditional strategy frameworks no longer provide enough guidance. Organizations need a clear center: a single, coherent organizing principle that defines what they are really about. A strategic center guides resource allocation, opportunity selection, and organizational identity. Columbia Business School professor Rita McGrath draws on real-world examples to show how companies that choose and commit to a center—whether it’s around a mission, a customer, a technology, a regional or national ecosystem, or friction erasure—gain clarity, speed, and coherence while reducing internal politics and paralysis. Effective centering is not about rigid positioning, she explains, but about choosing the dimension along which a company will pursue coherent opportunity sets as industries and old strategic anchors dissolve.
