Recession aftershocks, huge new risks, pervasive uncertainty—the challenges defining today’s business environment place a greater premium than ever on good corporate strategy. Yet the strategic-planning approaches that many corporations devised for such times are ineffective.

Corporate strategists have coped with very demanding business environments before. During the 1970s, rocketing oil prices and staggering levels of inflation halted a great period of expansion. Equity returns sunk well below bond returns for the market as a whole. Risk capital dried up, and the economy changed little.

But even then, some companies proved resilient. Then, too, modern strategic planning was born to help executives review all of a corporation’s products and markets and decide which deserved more capital and which should be closed. Although operations were a part of such reviews, operational fixes were assumed to be insufficient. Often the answer was an acquisition or a divestiture.

The new process captured top management’s attention. GE led the way, but practically all US companies, and many in Europe, accepted this new management art and its fundamental credo: destroying businesses—knowing when to let go and take a new direction—is a surer way to generate value and outperform markets than trying to protect what you...