You’re strategy is junk

So you have crafted a new business strategy. This is going to be the good one, the one that will double revenues within three years. If you're going to grow that quickly then there must be something potent under the hood. Let me take a guess as to what it might be.

It can't be ‘low cost’ or ‘cost control’. You're using the same suppliers as all your competitors so you're working from the same cost base. If you do decide to invest in establishing your own operations then you'll find that the experience curve is pretty steep these days, the race to the bottom will be a short one, and it's more than likely that someone reached the end before you.

It can't be some asset: a factory or tool. I don't know if you've heard, but in China it's only taking nine months to build a factory from a standing start, and to begin manufacturing goods. Tools and machinery are rapidly heading in the same direction as low cost manufacturers in China and elsewhere are getting better and faster at copying new technologies developed elsewhere.

It can't be IP, intellectual property. Books and recordings are returning to the days of minstrels and ‘pay for performance’. Ideas are rapidly heading in the same direction, caught between flexible manufacturing, 3D printing and Chinese cultural norms on sharing (and copying) information.

It can't be a capability, some business process or method. Anything that has been systematised will be copied with ex-staff, consultants and the industrial certification,-training-and-education complex spreading it far and wide. If you can do it, then someone else can too.

We also forget – in our lemming like rush for the new-new thing – that methods such as Design Thinking fail as often as they succeed. A capability might help you succeed, but it won't make you succeed. They're nothing more than tools.

It can't be your people, the individuals on your payroll. You're hiring from the same pool as everyone else and it seems like staff will only stay two years before moving on these days. At any point in time you have roughly the same mix of staff as your competitors. Plus, as Scott McNealy says, 'statistically the smartest people work for someone else'.

Even your brand is of dubious worth. While, in the past, it might have been as asset you controlled, the emergence of social media means that you brand's future is firmly in the hands of the customers who consume it.

The only thing left is culture. What are the the social norms of your organisation? How do individuals and teams react to change: threats and opportunities? How do you go about solving the problems that confront you? What is it that your culture cares about? And this is a culture that ropes in not just your own people, but those of your partners, suppliers and even customers.

So if your strategy is going to double revenues in three years, then it's your culture that is going to do it for you. ‘We just make products we'd love to own’, worked for Apple. What's yours?

The old approaches – based on cost, assets, IP or capabilities – aren't working anymore. At best they provide a transient advantage. At worst, they're a distraction.

When the environment is changing as rapidly as ours is today, a strategy built around some asset (infrastructure, machinery, IP, or even capabilities) takes too long to exectute. Inertia will carry you along for a while, but when the market shifts you'll find yourself like Wile E Coyote having run off the edge of the cliff, with the ground a long way below you. You culture is the only thing that will save you.

 

Posted under: Business-Technology

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4 comments

  • Ric Phillips on 2012-05-07 at 2:26 pm said:

    I like the thinking here. I agree with the thinking here.

    I found the choice of ‘Design Thinking’ as an exemplar of the next-big-thing a bit discomforting – because it is something I have been getting a bit excited about. 

    But on reflection I still agree. My interest in Design Thinking is specifically about whether it has the potential to break up very strongly established cultural norms (in the IT strategy and governance area in which I work) and foster new ways of thinking and working.

    I think it might – but I accept it may or may not be a valid hypothesis. 

    I vividly recall being at an in-house town-hall meeting and looking around at my 500 plus colleagues. “What we can do in the next five years is most determined by what the people in this room are capable of conceiving and committing to.”

    And of course by whether they can work together.

  • Johan J. on 2012-05-07 at 9:29 pm said:

    Hi Ric,
    I wouldn’t be too sure. Many thoughts and processes have been thought over the last years. Many of those are ‘older’ or more widely known than Design Thinking. Maybe they couldn’t solve everything that Design Thinking possibly could. But unless you work for the top 1% companies in the world, you still have problems which can be solved ‘the old way’.
    So why haven’t they been solved yet? The tools are available. I have to agree with the blog, these are just tools in the hands of the people, steered by a “greater good” like culture.

    Business world believes too much in it’s own advertisement. “You don’t exercise enough?” “This product will fix this for you” => “problem solved!”. The question should be “why haven’t you exercised” and “what will you do about this today?”

    BTW: A tool against a culture? Good luck with that! Unless the culture has already a built-in check “this is who we want to be” and Design Thinking will help you get there. If not, no tool in the world will be able to shape this. Only leadership 🙂

  • Peter Evans-Greenwood on 2012-07-17 at 9:34 pm said:

    As always, it’s what you do and not the tools you use. If you want a different outcome then you – personally – need to do something different this time around. Simply adopting a new fangled tool is not enough. It might help, but if you don’t change then you can’t expect the result to be any different.

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