Happy New Year! You might recognize the title of this month’s article which many of us use to ring in the New Year. It also has significance for business in the current COVID environment. In 2020 we saw perennial growth companies post disappointing results as a result of no fault of their own. It is times like these that companies need to respond to marketplace changes and spend time and resources understanding the environmental changes impacting their businesses to build strategies that will define their future success.
In Richard Foster’s book Creative Destruction, he builds the case that a company’s long-term success is dependent on its ability to adapt to marketplace disruption. In most cases the changes required are transformational and Foster explains why managers hesitate to explore or pursue change, preferring the comfort of the status quo. Foster’s research found that if companies do not get better at adapting to disruptive marketplace changes, their long-term performance will suffer. Unfortunately, that will be the case for companies that do not begin now to build strategies to emerge from the pandemic better than before.
Peter Drucker said, “the greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.” Consider thinking strategically about these three things to improve your organization’s ability to adapt faster to these unprecedented marketplace changes:
- Understand emerging competition in and outside your industry. This begins by understanding and adapting to the unmet needs of your customers. Assess your competitive landscape and how it has and will change. How have companies attempted to exploit new opportunities? In doing so you will gain a better understanding of alternative strategies to consider.
- Build into your planning process divergent thinking. Divergent thinking is a thought process or method used to generate creative ideas by exploring many possible solutions. To escape a short-term mindset, broaden the context of your decision making by practicing divergent thinking: conversation, observation, and reflection. The objective in divergent thinking is to ask the right questions so the focus is on solving long-term issues.
- Create and manage a portfolio of initiatives. Identify strategic initiatives focused on medium and long-term growth opportunities. It fosters experimentation, helps organizations tolerate small failures, and enables ideas that can lead to big successes.
- Be more strategic in allocating capital and talent. A main assumption in Richard Foster’s book Creative Destruction is not to maintain the same business mix for the long-term. Rather to enter and exit businesses as the competitive landscape shifts (may require divestiture). The objective is to allocate capital and talent to businesses and initiatives that create the most value to stakeholders.
- Create value not just for shareholders but all your stakeholders. The pandemic fatigue continues to build and challenge employees, customers, suppliers, and others deeply held beliefs and expectations. To keep stakeholders engaged and motivated in your business strategies, you will need to consider how you will address things like working remotely, health safety, and inclusivity.
These are just some of the actions you can take to ensure your organization will be proactive in adapting to future opportunities and threats. In today’s and tomorrow’s marketplace, given the right strategic thinking, you can be prepared to capitalize on the post-pandemic new normal.
We would welcome your thoughts. Please feel free to share this blog with your friends and associates as you see fit.
Socrates, a founder of western philosophy. “The secret of change is to focus all your energy not on fighting the old but on building the new.”
Charles Darwin, naturalist, geologist, and biologist. “It is not the strongest species that survive, nor the most intelligent, but the most responsive to change.”
Dick Albu is the founder and president of Albu consulting LLC, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family businesses. With offices in Stamford, CT, the firm is dedicated to helping its clients formulate robust business strategies and follow through on execution of key strategic initiatives. Dick Albu can be reached at 203-355-3784 or RAlbu@albuconsulting.com. Rob Krist, Managing Director can be reached at RKrist@albuconsulting.com. Please visit Albu Consulting’s website for more information at www.albuconsulting.com.