Flexibility is not strategy (part 3)

22 05 2009

A clear sense of purpose and a common understanding of that purpose seem like an obvious requirement to engender prosperity.  These elements are elusive because humans are not machines.  Creativity abounds, opportunities knock, tangents manifest, and allegiances are pledged. The confluence of these can help or hinder the evolution of companies and individuals.

Flexibility is the substitution of laissez faire for purposeful direction.  Unchoreographed dance or theatre may be expressive or interesting, but it’s not repeatable.  Good directors accept input, but in the end specify precisely what’s to be done for the entire piece’s overall impact – yet they don’t do the acting themselves. 

Actors and employees alike may not always be able to see how their specific role helps achieve the objectives, but leadership, transparency and ultimately trust resolves this.

There are many dimensions to business and life. It truly seems like a balancing act to stay at the vertex of creative forces and pragmatism in order to survive and/or thrive (they’re different, right?).  A goal-centered focus will bring clarity of purpose, but while that’s easy to say, it’s hard to execute.

It starts simply by simply starting – work with the givens

If you know what you’re good at, write it down.  If you are quantifying a shared sense of purpose into words, you may need to iterate on it (a lot).  It’s hard to grow from core competencies without a reference point.  If you think everyone “knows what the company is good at doing”, you’re wrong. 

Without the words on paper (or wiki, intranet, etc.), without leadership’s endorsement, everyone’s energy is spent by being both right and wrong at the same time.

A strategy for surviving

Chances are you went into business because you’re uniquely good at something.  Refining that skill set and optimizing how the evolution of competencies grow within an organization is a good recipe for sustainability if market conditions allow because it mitigates some risk.

A company “sticking to its knitting” is executing a survival strategy.  It is evidenced by their investment in research and development.  Previously announced projects or products will be quietly curtailed (hard to do with Google’s cache around) and new pursuits will be limited. 

For current niche-occupiers, that means new threats won’t necessarily come from outside (but maybe from homegrown innovation).

If competitive forces in your market allow your company to ride out economic turmoil without major changes in existing behavior, then a good strategy could be to refine what you’re good at and get better at it. 

A friend of mine used to say that sometimes diversification of focus will lead to pervasive mediocrity.  Why would you make a mathematician a second rate ditch digger?  Let that mathematician get even better at math!

Innovation may be the only survival strategy

Last year’s innovation may be this year’s commodity.  If your product or skill has been commoditized, the choices may be tougher.  You could hope that brand loyalty, customer inertia, and your war chest can help ride out any economic uncertainty.  You could also take your existing skills and products into new, related markets by investing in the work required to make your offerings an obvious fit for the new demographic.

But if your company is not uniquely situated for survival in a commoditized market, you may have to change up your tactics.  This is where flexibility seems attractive.  Adopting a stance that “any order is a good order” or that “any new market is a good market” may muddle your identity or purpose and set you up for long term headaches. 

Keeping a new niche happy may require unforeseen overhead from services, support, and development.  This eats away at up front revenue, threatens annuities, and can also lead to brand dilution if this new market’s experience translates into publically unhappy customers.

Instead, the honest evaluation of the market and your own situation will lead to new options – not all of which will be pleasant – like exiting a market, product retirement or worse (layoffs). 

A company faced with this dilemma this must understand their skill set and make a move.  They could also decide to offer something new to their existing customers, or refactor their existing product in a new way that eclipses the competition’s offerings.  It all depends on their supply of talent and the last 5-10 years of decisions in the bank.

An ongoing case study

Innovation often happens near a critical point where catastrophic failure is imminent.  This was basically the situation with Palm.  After some dismal product ideas and flagging market share, Palm needed a “Hail Mary pass” completion.

That happened at the 2009 CES.  This story is still unfolding, and it may not be enough to save Palm.  Whatever the outcome, it is a valuable lesson in when and how to execute innovation in a commoditized market (my favorite book about this is In Search of Stupidity by Merrill R. Chapman). 

Palm may have started too late for their own good, but someone made some tough decisions and they executed their strategy.  We’ll see how (or if) they completed their pass when the dust settles.

Is sticking to your knitting right for your company?  Only an honest evaluation and market intelligence can really help you determine that.  Certainty isn’t a luxury anyone can afford.  By the time everything is certain, the history has been written.

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26 08 2009
Pricing topics round up « Spackle

[…] know where you’re going, any road will get you there.  I also said it was important to have a sense of purpose and continue to review the goals that you started with in order to see if they’ve […]

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