In sport, ageing usually has negative implications. In business, ageing has positive implications. You can rejuvenate your business by using the knowledge you have and the novelties you meet along the way.
Tara-Nicholle Nelson suggested in an HBR article that we redefine our competitors as our customer’s obstacles: “The question is not who your competition is but what it is. And the answer is this: Your competition is any and every obstacle your customers encounter along their journeys to solving the human, high-level problems your company exists to solve.”
In the course of ageing, we get more and more conscious in more and more aspects of our lives. And our business. We can use this experience in meeting those obstacles of our customers so that we can stay in the game.
Where do you want to do business? Where you're the only one who meets the customers’ needs and nobody else does. In this way, you definitely have something that is valued.
Okay, that's easier said than done. The real stuff is to translate this simple model to your reality. It's you who defines the conditions and attributes in this model. Think of the classic story of Henry Ford. He understood that customers wanted speed, they needed something with which they could get from one place to another in a relatively short amount of time. His interpretation led to cars instead of faster horses. But it's far from obvious, it's the challenge you have to take to find your strategic sweet spot.
So always search for the right / new kind of interpretation of what you observe in your market. You have to be specific, you need new approaches, right questions, analogies and even external views might help you. In your strategic thinking, you question your worldview from time to time so that you can keep pace with the ever changing circumstances.
One known model for this is the blue ocean strategy. Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. While in the fundamental approach of competitive strategies defined by Michael Porter your position can be different or low cost, here it is an and-and relation. A good way to start redefining the boundaries is to investigate the following four: 1) what can you add that nobody does, 2) what can you increase in your approach compared to others, 3) what can you decrease in your approach compared to others, and 4) what can you put an end to?
I also suggest using abstractions to get rid of the concrete attributes that influence your thinking and to see the meaning. In Ford's case, movement was the real task to do, so he left the existing solution of horse riding behind and searched for something that could be created based on the inventions and solutions of his time.
Are you ready to take the challenge of finding your strategic sweet spot?
The Strategic Sweet Spot of a company is where it meets customers’ needs in a way that rivals can’t, given the context in which it competes.
As strategy is about defining and implementing business assets according to the value(s) that we believe help us strive in the market, this approach has to be tangible along the entire way, from top to bottom. That is consistency. In internal operation, in business processes, in brand presence, ideally everywhere. Still, consistency is not equal to permanence. Consistency is more of keeping the values in place as long as they serve well, and long enough to have their effects flourish. While permanence is about being constant, sticking to something no matter what. For a while, the two might look the same, but when time comes and the circumstances challenge the business, consistency allows us to modify where it is necessary, while permanence ties us up to decline in the absence of evolution. The tricky part is what ‘long enough’ means. There is no exact approach here, and that’s the beauty of strategy - you have to recognise if it does not serve you well. It also depends on how well you defined the values in the first place. You can never be sure. But you can be certain enough, you can feel almost sure.
Nokia was among the first ones to launch touch screen mobile phones. Yet, it was not successful enough, so they called it off. They had the clear feedback that it would not pay off. Till Apple created something that helped them jump over the chasm. Their approach was needed to spread a technology that was less accepted before. After some years, it was easy to tell that Apple had been right, and Nokia had not. Is it that Nokia was not consistent enough? Only they can tell.
Let’s take a look at the practice of big companies. Recently customer experience management has been a standard pillar of their strategy. Yet it is usually devalued as a focus point. Don’t get me wrong, even the presence of such a focus point is kind of an advancement in many organisations. Let me tell you this.
For some years in my career, I was responsible for all kinds of propositions, including acquisition, upsell, cross-sell and retention. Based on the customer behaviour we saw during product usage, we defined the next version of the product that included more of a certain element and less of another, while we set the price at a little bit higher. Contentwise it was similar to the previous one but it reflected more of the actual and current customer need. Our story was to increase the revenue due to the better alignment of features, even compared to the competitors. Though it never reached the market as the controlling department called it off, because the existing version was still generating the expected financial results that were enough for the yearly targets.
And when the bonus of the top management was about better customer experience, we had to implement discounts to boost satisfaction. Of course, we needed to balance between financial and customer results, but that time the trigger was coming from customer experience. Some months later there was a nice momentum to further boost customer satisfaction. It was the company’s birthday that had always served as a time for exciting deals for the customers. So we made a proposal, but once again, no matter how we tried to comply with the former management expectations, it was cancelled. The reason was simple: financial results were a bit lower year-to-date, satisfaction was beyond bonus targets, no need to risk unnecessary revenue loss.
In these examples, customer centricity was a recurring focus point, an aspect we investigated from time to time. But the consistency was about the financial performance, that was the overall principle the management followed. Strategy was eaten for breakfast by short term goals. Due to this practice in many companies, the management rarely gets to know the long term effect of certain actions, like caring activities. It remains in the books many times.
You always need to grow or search for growth, because staying put leads to decline. If you just run your business the same way as it has been for years / decades, there will be one or more competitors who change and innovate something, which makes them better and finally they will beat you. Sometimes innovation is just good enough for keeping the same level of performance. Otherwise you start going down.
There are three basic approaches in this quest:
The first is about focusing on your core competence and basically doing the same but with less resources needed, so being cost efficient.
The second is about doing what others do, but beating them in the way the output is generated, outperforming them. In other words, with the same resources, you can deliver more.
The third is about redefining the status quo and creating new standards, new methods. It is typically the world of startups or when an advanced solution enters a relatively underdeveloped market (some countries skipped the era of pagers, but mobile phones rapidly got huge penetration, or some missed the cheque and jumped into the world of bank cards). So after a while, a newcomer can combine the existing needs with a new solution, which creates innovation and differentiation, while the incumbents can be stuck in the old one. It is called disruption.
In innovation, new ideas are not the hard part, but fitting them into the actual practice, realising them is.
Innovation is not just the brand new technologies or procedures that nobody has used before. Combining two (or more) already existing things or notions is also innovation. In many cases, yet, innovation is about getting to know, learning, trying out and adapting the novelties and the inventions that have come up to our existing business. We search for the intersection of the well known and the new. This way we can stay up to date and efficient. You can always do something differently and better.
Creative minds are often thought to be flying freely without any constraints and finding the hidden pearls of meaningful and beautiful life. But that’s just more of the notion of idea. I mean, it’s a start, and yet, only a start. Bringing that idea to life is the essence of creation. The creative people who succeed in their fields are very structured in many aspects. When you want to deliver the message, you need to organise everything accordingly and if you miss only one element, you will fail. When you picture a struggling mind in a movie, you can use close frames, darker colours, shadows, or even some gloomy sound. What you show and how you show it serves the message in every possible way. Change the music to something happy and silly, and you lose the atmosphere at a snap. That’s what I mean that creative (and seemingly unstructured) minds are structuring minds at the same time. And it’s quite the same when it comes to innovation in business. Everyone has a good idea. The tricky part is how you bring that idea to life.
This combination of different statuses of mind, being creative and then being systematic, suggests that not everyone is suitable for this kind of activity. Some are great at generating ideas, but then they can easily lose their interest in the long and hard journey of realisation that might be needed. Others are good at doing the everyday and sometimes repetitive tasks, finding the meaning in the tiny parts that add up as something extraordinary, but they cannot raise their heads high enough to look around from time to time. None of these capabilities are wrong, we just have to be aware of what we possess. The strategists have the ability to jump from one to the other, from operative layer to abstract (and vice versa), from brainstorming to building the foundations, from long term to short term, and so on.
We have covered some major aspects of how to stay in the game. In general, just as the nature of evolution, the companies that can adapt the novelties right and can adjust their operation to the ever changing circumstances will last longer.
By defining the strategic sweet spot, you define where you can play for a long enough time and sustainably. Hopefully you have done a great job at choosing your playing field in the beginning, so you can stick to your values and you can keep on executing your strategy when it favours you - you do your business consistently.
But as the circumstances change, you might need to revise your approach and adjust your strategy. With a successful quest for competitiveness and with innovation, you can fix, refresh and boost how you play in the changing game.
