I once worked with a client who at one point, about 20 years ago, had the leading technology in North America in its industry. It was a company that was making money hand over fist and couldn’t make their product fast enough to keep up with orders. They were practically a monopoly in their space and so instead of customers turning to their competitors, they had to wait their turn, frustrated or not. The company got complacent, rested on its technology, confident in its monopoly…until it was too late. Over the years, the market changed, customers sought other products and frankly, it was outdated anyway, as the company had never bothered to evolve its product with the changing market. Twenty years past its glory days its technology was sold and the employees were out of work. They were stuck with 20th Century thinking in the 21st Century.
It reminds me of the French strategy of building the Maginot Line during World War 2. A line of concrete fortifications, obstacles, and weapon installations built by France along the borders of Germany, Italy, Switzerland, and Luxembourg, the line did not extend to the English Channel. Based on their experience with trench warfare in World War I, they could not envision was that the Germans would adopt more modern tactics and attack at the French weak point through the Ardennes forest, thus encircling the Allies, driving the British into the sea at Dunkerque and forcing the French into a humiliating surrender.
An Agile Strategy Is Worth Its Weight In Gold
By contrast, The Swiss National Redoubt was a defensive plan developed by the Swiss government beginning in the 1880s to respond to foreign invasion. In the opening years of the Second World War, the plan was expanded and refined to deal with a potential German invasion that was planned but never carried out. The plan involved a series of fortifications that secured the mountainous central part of Switzerland, providing a defended refuge for a retreating Swiss Army and enabling them to cut off the means for transportation through the Alps of any attacking army, making the taking of the entirety of Switzerland at the very least a very expensive proposition.The problem with the French strategy, and indeed that of many organizations in today’s dynamic economy, is that while they had developed a clear strategy on how to defend themselves, they had leaders who were ill-equipped to anticipate new forms of competition, had developed a culture of complacency based on their belief that their massive investment would make them successful, had therefore ignored alternative scenarios that might need to be considered, and therefore did not have the strategic agility necessary to react in times of challenge.
The Swiss on the other hand recognized that their 50-year-old approach to defense necessitated revamping, considered the different origins and forms of attacks likely and engaged large portions of their population in building and believing in their plans. Regardless of the fact that the Swiss never ended up coming under attack, they at least put themselves in position to be more successful by virtue of their approach.
Strategic Agility is Essential to Business Survival
I know hindsight is 20-20 and it’s much easier to see what should have been done than what is actually done, but in today’s world where technology changes markets in the blink of an eye, organizations need to take the time to develop their strategic plans. They need to look out into the future to try to anticipate longer-term investment needs and business model changes and prepare for these.
Had the client I worked with been more astute and looked at all the possible threats to their technology, including issues such as market shifts, they could have stayed a step ahead and been ready to make necessary adjustments to stay relevant.
Companies do though have to continuously challenge their plans and assumptions as well as stress-test them against the potential impact of disruptive forces. Similarly, their leaders need to grow, through continuous learning and capacity building to be able to see and deal with the threats in their path. Ultimately though, it is how they shape the culture of the organization that can make the difference between victory and capitulation in the war for business.
Kevin Joy is a partner with L&C Strategic Advisory Consultants and brings over 25 years hands-on experience in business strategy. For more information on L&C’s strategy consulting work, visit our strategy page.