Monday, June 19, 2017

Combatting Complacency in Strategy Development

When businesses enjoy a high level of success, it can become tempting to rest on those laurels and allow a degree of complacency to set in. To combat this, good strategy must be forward thinking and innovative enough to ensure that past success does not blind leaders to new trends or markets that will be necessary to continue thriving in their industry. The strategy development process is further complicated when cutting-edge or disruptive technologies are involved because, as seen in Why Good Companies Fail to Thrive in Fast-Moving Industries, disruptive technologies are inherently unpredictable and unable to be planned for whenever a company is enjoying success with an existing set of strategies or markets. This uncertainty means that companies need to embrace uncomfortable or counterintuitive ideas in order to exploit new markets or technologies as they reveal themselves.

            Adopting or pursuing those ideas that run counter to the company’s core strengths can be uncomfortable to the point that leaders within the firm decide to avoid the idea altogether until they start to feel the negative pressures of new entrants to their market. However, as seen in the Honda motorbike case, sometimes the best way for a company to overcome complacency with their strategy is to be receptive to employees who are most clued in to the changing landscape or new developments that may not have seemed obvious given the historical market that the company operated in. With Honda, customers started using their low-end motorcycle in unique hobbyist dirt biking ways that ran against the initial idea to break into on-the-road highway use. Fortunately, some keen marketers noticed the fun free-spirited nature these customers were using the bikes in and decided to encourage leadership to pivot the strategy away from the underachieving market they were trying to operate in.

            In conclusion, the only way to offset the blindness that sets in when a company is used to operating in a certain market or with a specific use of their product is to be as receptive as possible to different technologies and product uses that may seem counterintuitive to their existing strategy. In effective, this flexibility will allow the company and its strategists to evolve with their market, rather than trying to fight strong forces that are outside of their control. Of course, this assumes a level of discipline to create avenues where new ideas are discussed and proposed and an environment where the status quo is not elevated to a sort of untouchable level.

--Dave DeBor

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