In Ken Favro’s December’s strategy and business post, he pointed to the rapid expansion of the word’s “business strategy” since 1980 on Google’s analysis of word usage – it has increased 900%! Business leaders are experiencing ever more rapid change in their particular area, and realize that strategic thinking is no longer captured in 5 year projections, or depending on competitive advantage lasting even a full business cycle. A few stories from the field will help. I was working with a person who recently was hired as CEO of a successful software firm. They had a big success in one area of software, and had invested 12 million in creating a parallel product, which they have asked this new leader to ramp out. The problem he wanted me to address was the reality that he could find no opening set of buyers who wanted to buy the solution they had created. Talking with potential customers revealed that they didn’t want this software, and money was quickly running out. Another firm I worked with had successfully created unique and exclusive relationships with a number of top suppliers of furniture and home décor products that made them very successful with high end clients. In a matter of a few short years, the Internet had wiped out their competitive advantage, and they needed a whole new strategy to reinvent their company. Stories abound of organizations feeling stuck or even worse sinking in sales results that quickly are threatening the viability of their company.
What many of these leaders are not aware of is the very nature of doing strategy is changing dramatically in today’s volatile, uncertain, complex, and ambiguous (VUCA) market conditions. Today competitive advantage is disappearing, and transient advantage is becoming the norm. To compete today requires the ability to recognize opportunities early, and evaluating options on an ongoing basis. That requires new strategic tools that help the leader navigate waves of customer preference and ever evolving product and service offerings. Put in a word, organizations need to become adaptive to their environments. Returning to our theme as organizations as living systems, every organization must develop a highly developed “sensory system” that include ways to sense, see, feel, hear what is happening in their area of expertise. This, in turn, means that strategy is not just informed by the top leaders, but must include constant interaction with the people who are in touch with this information on a daily basis; customer service representatives, the sales force, and other customer focused individuals in the organization. The strategy itself involves testing and experimenting with a few scenarios, and requires ongoing communication between the leaders and the frontline employee’s as feedback comes from the field. A question for discussion: what have been ways your organization has strategically responded to the ever changing markets that you are involved with?