Strategically capturing the value of new market opportunities is possible and achievable by following an incremental, 5-step framework
Related articles worth reading at the end of this newsletter
How to strategically sense market changes and innovate intentionally
“Sometimes surviving means getting out alive, while you still can.” - unknown
What do you do when you wake up one day and realize that the market has changed?
People keep telling you that you need to change with it. But that’s easy for them to say, because it’s not their business.
You don’t know if it’s actually a good idea to make changes.
Because the market may go back to the way it was - and you don’t want to miss out on that business.
But even more importantly: You know, that the changes that you’d have to make to follow the market would have a significant impact on your organization.
Whether these changes would result in success is all but certain.
Yet, at the same time, if you don’t change with the market, your business may fall behind and even fail altogether.
Situations like that occur frequently and they pose one of the most difficult scenarios for leaders.
Because if they make the right decision, they are celebrated - but just until the next, similar scenario emerges.
If they make the wrong decision, it can have disastrous consequences and, in some cases, even end careers.
And so, very often, so-called decision makers opt for not deciding anything. Because it’s always easier to blame a downturn in the market than to take accountability for a proactive decision that turned out differently than planned or hoped.
So we’re left with the question:
Is there a way to keep the current business and at the same time explore opportunities in the altered market environment?
To proceed with caution, but at the same time validate potential opportunities and prepare the organization to make a swift turnaround once everything is set and the success of new business models has been proven?
The answer is short and pleasant: Yes, that’s entirely possible.
The key is to shift your perspective. If you’d translate the above into the world of sports, the term you would use to describe it is: “playing defense”.
In virtually all sports, playing defense is a losing strategy. Because you don’t score by playing defense.
So what does playing offense in business look like?
Playing offense in business means following a structured process for strategically developing new business opportunities:
1 - Strategic Sensing
Develop strategic foresight by regularly following established research institutes and conducting your own customer- and market research.
2 - Leadership Alignment
Dedicate time with your top management in regular intervals, for example in offsite meetings, to jointly ideate where you may take the business next, and align them on the overarching business objectives.
3 - Continuous Validation
Designating dedicated resources to ideate and validate business- and product ideas and to to grow them to a meaningful size.
4 - Organizational Design
Once new business units are grown to a point where they are ready to scale, deliberately redesign your organizational structures to incorporate the growing business models into the current organization.
5 - Organizational Transformation
When everything is set, strategically communicate the “why”, the “how” and the “what” to the entire organization and execute the roadmap for change swiftly and decisively. At this point there is no cause for hesitation, because the new course has already proven its success.
“This sounds like a lot of work. We don’t have the resources to do this.”
A common misconception is, that strategic exploration of new opportunities is a cost center. When it’s done right, it’s, in fact, the opposite.
The whole point of a strategic value transformation is to anticipate changes in the market and develop new business in small, incremental steps while the external change is occurring to fully capture the value of that change.
The five steps above are the missing piece of the puzzle that, once inserted, is a game-changer.
Because by proactively sensing new opportunities, you take whatever circumstance you find yourself in, and move from a reactive, passive state into a proactive state where you’re in charge.
So here’s a call to action:
Make strategy a part of your agenda as a leader!
If you need anything in terms of how to best get started or which methods or frameworks to apply: I am more than happy to share our leading practices - just send me a short message and I’ll share the materials with you
Related articles worth reading:
The value of facing reality
A short read by Farnam Street on Intels impressive turnaround in the 80s. How Andy Groves saw the inevitable coming and yet faced significant resistance when he wanted to turn the (gigantic) ship around:
Designing out of difficult times
McKinsey’s take on current and upcoming challenges (mainly inflation and recession). The recommendations are obvious and there isn’t much depth in the article, but it’s a decent summary:
Overcoming complacency in your leadership team
If it’s hard to get your top management excited for new business opportunities, here are some factors you may want to consider when evaluating the underlying causes:
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