In a world of overlapping industries, disruption and uncertainty are the new kind of normal. It is more important than ever that companies and their strategic advisors widen their strategy lens on the broader business operating environment and further refine their strategy development skills.
More often than not these days, your competitor is someone you haven’t yet considered. We’ve seen this precedent over and over. Remember when iTunes came into the music industry causing a massive overnight disruption? It took a complete outsider to say, ‘There is fat in the music industry and we know a way to do this differently.’
New business models like Airbnb have come out of the dematerialisation movement, aided by new technology where idle assets need to be utilised. In this case, it began with two guys who had spare space in their apartment while having trouble making their rent. They not only transformed the travel and hotel business, but their model has cascaded into a growing new industry of collaborative consumption ideas. Think also of how 3D printing is leading to less manufacturing waste, capital employed in inventory and just-in-time supply.
Another example of disruption is Google Earth; 20 years of research might be made obsolete by the rise of electric cars, with sophisticated car cameras set to be the next big thing in landscape mapping. It won’t be long before Volkswagen and other manufacturers are selling real-time information to transport ministries on the location of pot holes on city roadways.
Strategy can be a leadership tool
So how can we avoid becoming someone else’s next opportunity? Strategy is not only an analytical tool, it is also a leadership tool. Companies need to work harder to align strategy with market conditions. Look at how Blockbuster failed to change with the market while Netflix transformed itself. As a DVD distributor, the rise of streaming could have put the service out of the game, but Netflix knew its customers and market and adapted its strategy to the disruption. Is your strategy overpromising and under-delivering?
Is your data out of date?
Strategy planning need not be just an annual thing either. The shelf-life for information is getting shorter and shorter. As a consultant, I recently worked with a client eight months into its annual strategy with still no strategy in place. Separate divisions might be delivering on narrow visions based on convenient, inward-looking plans – but in the meantime, the industry is moving on.
The Strategy programme is a great opportunity for senior executives and board members to further develop their skills to meet the challenges. Old business models may no longer be fit for purpose so this is when strategy becomes essential – both as an analytical and a leadership tool. Every senior executive needs to renew and refine their understanding of strategy in today’s environment.
Learn more about our Strategy programme.