Taking
Strategy from Development to Implementation
The correct time to assess your strategy is NOW! “Rather than looking for the next musing, it’s
probably better to be thorough about what we know is true and make sure we do
that well”, said Phil Rosenzweig, a professor at IMD on being asked, “What’s the
next new thing in strategy?”.[1]
The above line is well
said as the strategy cannot be formulated to a framework of rules and
procedures. A strategy is generally idiosyncratic to their organization, people
and markets. Also, many strategies emerge over time rather than from a process
of deliberate formulation. [2]
However, strategists also need to take care of the emerging trends that affect the business. Chris,
Martin and Sven tell us that, there are ten tests on their list, and not all
are created equal. The first— “will it beat the market?”—is comprehensive. The
remaining nine disaggregate the picture of a market-beating strategy, though
it’s certainly possible for a strategy to succeed without “passing” all nine of
them.
Two of the nine tests –
Test 4 talks about “Does your strategy put you ahead of trends?”, and “Test 6:
Does your strategy embrace uncertainty?”[1]
As the article states, many
strategies place too much weight on the continuation of the status quo because
they extrapolate from the past three to five years, a time frame too brief to
capture the true violence of market forces.[1] Unwillingness to
cannibalize a legacy business or an attachment to yesterday’s formula for
success shook the real-time industry of Blockbuster. Netflix crushed the market
with a new trend. Blockbuster’s company spokesperson said, "We have every
reason to believe we will come out of the recapitalization process financially
stronger and more competitively positioned for the future." It doesn't
look like things have gone according to plan. Although Blockbuster began a
rentals-by-mail and streaming service belatedly to fight against
competitors like Netflix, they didn't come on strong enough or soon enough. It
was a battle between old technology and new technology, and it looks like new
technology won out in the end. One
of the most interesting stats on the infographic is the fact that "Back
in 2000, Blockbuster declined several offers to purchase Netflix for a mere $50
million." The offer was not too shabby for a company that was, at the
time, bringing in billions of dollars in revenue. Blockbuster is certainly
hitting themselves for not jumping at the offer, which may have seemed
irrelevant and unimportant at the time.[3] Blockbuster's strategy neither put Blockbuster ahead of the trend nor embraced the uncertainty.
Thus, we see how
emerging technology can transition a well set up industry. “We can say that
technology by itself is not the disruptor. Customer centricity is. Amazon did
not kill retailers. Convenience and better range did.” – Mad Over Marketing
[2] For a classic
statement of the idea that strategies are more emergent than planned, see Henry
Mintzberg, “Crafting Strategy,” Harvard Business
Review, 1987, July–August, Volume 65, Number 4, pp. 66–75.
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