During A Radical Market Shift, Survival of The Strategic Fittest
Updated: Jan 29, 2021
Necessity and curiosity is the 'mother of invention' - and innovative strategic change can become an opportunity during a radical market shift.
The current economic downturn is not the time to slow down. It could be your chance to be the next leader of the pack as the "Survival Of The Fittest" - which is a well known phrase that originated from the Darwinian evolutionary theory as a way of describing the mechanism of natural selection. So, what does all of this mean for the strategy of a business or a brand? It means the company or brand best “fitted,” or best “adapted” to its markets and customers will survive and even thrive to outperform competition.
Strategic fit expresses the degree to which an organization is matching its resources and capabilities with the opportunities in the external environment, which right now means trying to match a market in radical change. That's the challenge for many business leaders.
Successful companies over time re-invent, adapt to market change with agile, market-driven re-iterations, slight twists, turns and adaptation - then boom! a new business model for the next evolution.
Entire industries are going through radical marketshift and transformation. During the pandemic the online experience and business change has accelerated. How should movie theaters and entertainment venues survive? How do musicians and live music venues survive? Well, some think it took a pandemic to change the movie business. Use this time to reimagine how to serve customers better and provide a unique customer experience to gain, instead of lose market share. It’s about getting fit for a present and future that looks very different than even last year.
The other day I had a conversation with a business owner about how they had to transform their entire business from a national network of cosmetic service stores into all online business. It was a major change of business model, sales, distribution and leadership driven by the pandemic, and just one example how the already existing mega-trends is accelerating industry disruption.
Strategic evolution of the fittest: that’s the playing field in the world of business today, and it’s not level. Use the radical market shift as leverage to business transformation and success
Many leaders are concerned if their current strategy is sufficient, and radical market change drives uncertainty - but now is not the time to slow down. Business growth initiatives are critical for economic value creation, even survival, throughout an economic cycle and you should have conversations right now with your leadership team and advisory network on how to make your business the winner on the other side, and grow your company through the stages of ideation, incubation, operation and transformation.
Whether you’re a startup or a traditional enterprise, the road to success in this competitive game is the same: you need a winning strategy that takes advantage of the marketshift.
Ask yourself whether you have a winning strategy that has the potential to scale and make a difference through these difficult times. Ask yourself if you have a strong enough business model that can execute on that mission and vision. Ask if you are agile and willing to adapt and change, eventually reinventing yourself and pivoting when you have to, because you probably will need to.
Here's my three-step approach and advice to business leaders that want to evolve or even transform their business to take advantage of the change of time..
1. Assess The Impact of Disruptive Forces to Envision the Future
Understand the drivers: First you have to establish a clear understanding of the paramount forces that drives your industry right now -like the pandemic, AI technology, online business models, regulations etc. Now you can envision what that means in future scenarios which is relevant for you in your context right now. It's about a futuristic perspective that ties today to tomorrow. Then it’s about understanding why your mission is relevant to your customers and defining a clear vision and strategy to achieve your company goals.
Now is the time to analyze your business and product portfolio to understand the future value creators and change business models to serve the customer in the new reality as well as taking full advantage of M&A opportunities
2. Decide Where to Compete And Adapt Your Business Model
Where to compete: You have the opportunity to disrupt your industry if you have a better understanding of the changed customer requirements, competitive landscape and market attractiveness - and evolution of your business model optimized to accelerate and convert the near term market potential into long term market leadership.
The right to exist: In essence, any company ambition is trying to solve problems or create something that’s going to grow the company, create economic value and maybe leave a mark making a difference in this world. Knowing exactly what that is, and who it’s for is the starting point of defining and driving your evolution and disruption potential. That means being clear on your mission and vision for the long-term company building and aligning it with resources and competencies.
3. Reimagine Your Competitive Advantage
Future value creators. Once you’re clear on your mission, vision and business model is set up for successful company expansion that aligned to your goals, it is the time to analyze your business and product portfolio to understand the future value creators products and services to serve the customer in the new reality as well as taking full advantage of M&A opportunities. That includes how to deliver on your strategy with the distributed organization and value network.
Prepare the competitive battle. You have to decide what competitive advantage looks like in the future scenario. New ways of making and delivering your product is most likely the way to go. Strategic advice to stick to what you do best, to specialize, is almost cliché. It is also potentially dangerous because yesterday’s brilliant strategy doesn’t matter if the world changed this morning. Adapt your strategy or die.
Optimize the portfolio of business units and products to gain competitive advantage by blueprinting the best strategy for maximizing full economic value creation potential and design a competitive value creating business strategy to market leadership
With Cognize Inc. as an example - the mission was to redefine and disrupt the traditional computer vision industry for situational awareness by adding Cognitive AI and convert technologies from autonomous cars. So from there, we defined three core technologies we needed to master: understanding sensor fusion, navigating the edge-to-cloud processing, and expertise with intelligent systems and AI. A combination of those three competencies is what made sense in light of our mission.
It's all about execution: You have to drive your mission and vision through your leadership execution; your plans and tactics should inform every decision you make every day. It’s not about three bullets on your website that nobody looks at again.
Now is the time to adapt with strategic change -turning uncertainty into opportunity. It’s time to envision what the future looks like and reimagine your business with a winning strategy.
I would love to hear your story and start a conversation about how to bring your business to the next level. The first 30 minutes consultation is on me.