Monday, May 29, 2017

When Strategy needs a Strategy - KaBoom case

The KaBoom case is an interesting one for the  below two reasons:
It shed light on to the nonprofit world which is totally unknown to me
It also reveals strategic pitfall that could be considered for the corporate world
One take away from that case is, organization should be able to swiftly shift strategy when reaching a critical juncture point. After 7 years into existence, KaBoom went quasi-instantaneously from directly building playgrounds with corporate partners to providing training/grant to help communities build those playgrounds. 
While the vision of the organization stayed the same: “to help develop a country in which all children have within their communities, access to equitable, fun, and healthy play opportunities, with the participation and support of their families and peers.” ,  lack of systems in place to manage growth had make the organization a victim of its own success. External pressure from  noticeable partners indicates difficulty in working with the organization and will command a change in strategy.
At that point,  important questions have to be asked:
a) What is an appropriate strategy? 
b) When is it appropriate to change strategy?
Keep in mind that those questions are equally relevant in the for-profit or corporate world. The approach of the Harvard Business Review in “Your Strategy needs a Strategy” offer elements of solutions to those questions by providing a roadmap for strategy formulation. The research stated a strategy formulation can “fall into of four buckets according to how predictable an industry’s environment is and how easily companies can change that environment”.  Which means that strategy depends on predictability and malleability.
From 1995 to 2002, Kaboom never changes its playground building strategy. Circa 2003, a proposed strategic shift came into life with no plan of future changes nor further upgrades. KaBoom operates as if it were in an environment where “the most attractive positions and the most rewarded capabilities today will, in all likelihood, remain the same tomorrow”.  Apparently, Kaboom employs a classical strategy which is very common in mature industry. But, consideration of the below facts reveals the opposite:
Competition in playground builds is increasing at a high rate (changing competitive dynamics become a threat).
Large corporation can be slow movers, making partnership more difficult to build but lasting longer 
Competition extends to the for profit world ( For-profit organizations also build playgrounds…)

We see that KaBoom evolves in a fairly predictable and malleable environment. As such, a more visionary strategy approach in finding new partners and funding would have been appropriate. 
Having worked for a small Financial Accounting software firm, I witnessed similar pitfall regarding strategic style choice. 
Fifteen years ago, a goal was set by the owner of company XYZ: Offer investment accounting solution that produces comprehensive, accurate and timely book of record to support key investment management processes. 
A target market was also set: large and most complex investment funds in the US, including institutional investors, plan sponsors, asset managers. 

The plans never changed. While the company knew some kind of growth at the beginning, we were operating on survival mode. We depended on a few key clients to make end meets. In a highly unpredictable industry such as software industry, our strategy did not allow us to keep up with technological innovation, global competition…Three years after my departure, the company was acquired by a competitor only because of its a high valued customer list. I am confident that a more adaptive approach could have given a different output.

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