Businesses in every industry are facing "once in a generation" levels of technological and economic disruption. Your organization has likely felt some of the effects — be they challenges or opportunities. Time waits for no one these days, so unless you have a fascination for what the corporate graveyard feels like, it’s time to reinvent your business (for the digital age). In my last blog post about the Vortex of Change, I went over the importance of having a clear, unified vision for your company’s future. The vision articulates where you want to go, which isn’t an easy task (nor is it a “one and done” exercise either). But once your leadership team works together and establishes a vision, it’s time to consider the strategies to fulfill it.
In this post, we’ll dive into creating a business strategy for this digital world. The strategy endeavors to lay out what exactly your vision means in practical terms and how you plan to get there.
Does Your Strategy Create Discomfort?
Perhaps an odd question to pose but there’s a reason. If your strategy creates discomfort, then it’s likely been shaped outside the comfort zone. If not, take another look. Is it a simple evolution of the current state? How does that play out? As you think about that, also consider the following three elements, each of which plays a role in the development of your strategy:
- New Marketplaces and Business Models
- Acquiring New Capabilities
- Taking Risks — Risk Nothing, Lose Everything
New Marketplaces and Business Models
The Vortex of Change is resulting in new ways of doing business, and that may lead to many questions for your business. Should you retain and grow existing customers? Win new customers? Both? What marketplaces should you look at? Existing or new? Is your desired role to lead or act as a participant? What business models do you employ to ensure you give the customers (whoever they may be) what they want and give it to them in a differentiated manner?
You might want to think about the sharing economy where questions of simply having access to services versus actually owning products will arise. The co-creation economy, where you give the customer some control so they can “co-create” something more than what’s on the shelf might be worth a look. Or will a new model shift you up the value chain from commodities to products to solutions to experiences? Customers will pay a lot more for the right experiences, but there are implications depending on how far up the chain you decide you want to go.
As you consider these questions, also ask yourself whether you believe you have sufficient differentiation to make a dent in the market. Remember, there’s a difference between innovation and emulation! This doesn’t mean you have to lose sight of the things you’re good at (far from it, if you’re using a shaping strategy like FujiFilm did when it created Astalift Cosmetics), but your strategy has to differentiate. It has to allow you to reach your customers differently. “Me too” isn’t good enough.
In addition to what customers, markets, and business models you plan for, you also need to think about what new partners, new competitors, new skills, new capabilities, new risks, and new channels you should include. They’re all part of this complex mix. You need to be out of your comfort zone. If you’re not, you’re likely looking at a subtle evolution of business as usual. Enough said.
Acquiring New Capabilities
What I outlined above doesn’t fit neatly into the category of “business as usual.” Nor is it intended to. If you’re charting a new course for the company, it’s likely you’ll need different/additional capabilities including people, infrastructure, and data.
Think about what new skills you’ll need, where they’ll come from, and what they cost. Is it companies, people, both, other? Also, keep in mind both acquisition and integration will be required. Where does automation fit in? How does that change the landscape? You’ll also need infrastructure capabilities in the form of an open and standards-based digital platform. This platform needs to provide the foundation for innovation and the elasticity for change to help you operate at the speed of the customer. This also ushers in a major shift in the role of IT, from support and enabling to integration and innovation. IT becomes a business unit, in many respects. We’ll discuss this further in an upcoming post.
Taking Risks — Risk Nothing, Lose Everything
Any new path comes with new risks that must be considered. You need to know your overall tolerance for risk as a leadership team but go into strategy creation with the understanding that if you risk nothing, the potential exists to lose everything.
Do an honest assessment of market acceptance based on the value you feel you’ll deliver with the new strategy. Cost and complexity of regulation and compliance, data sovereignty issues, potential disruption or cannibalization of the core business, disruption to current partnerships, the rise of cyber threats, and social acceptance all need to be addressed. None are easy, so my listing of them isn’t intended to suggest they are.
A Strategy that Lives (Versus Collecting Dust)
The point here is that the market is going to keep changing. Your strategy needs to reflect that. It needs elasticity. It can’t be a once- or twice-a-year consideration. It’s also not a case of “meet more often.” Continuous cycles of insight, iteration, and improvement need to be part of the development DNA. If your strategy doesn’t continuously evolve and change, neither will you!
In my next post, I’ll go deeper into how you can start acting on your digital business strategy through culture and workforce enabling. We’ll see how getting people behind the plan is critical to success and how to actually do that, so stay tuned. To learn more in the time being, you can read more about business leadership at Intel on our blog or sign up for the IT Center newsletter.