Forget Christmas its all about blue sky

The very first time I went to Babson, they did an activity with me which literally changed my professional and personal life. I replicate it with people all of the time and it features in my book ‘In Cahoots’

I wanted to talk about it now because now is perhaps the most important time to revisit and re-do this.

As the pandemic continues to evolve and we move once again into a new phase with the vaccine and all, now is the time for us all to start bracing ourselves for new challenges ahead.

I am wondering whether the strategic approaches that proved to be successful in the past will still apply to our new changed business realities in this post-pandemic world.

Indeed, many changes are likely to occur – supply chain restructuring, altered customer preferences, changed government regulations, to name a few. But one fundamental reality will endure and intensify.

In the immediate aftermath of the pandemic, companies will face a heightened degree of competition as customer demand is depressed due to a reduction of income, persistent unemployment and looming uncertainties.

While everyone desires a V-shaped economic rebound, it will be difficult for companies to overcome the current financial distress once they are locked into a hopeless game of dividing a shrinking pie.

It is time that we review the key elements of a blue sky mindset.

Ask yourself the following questions and consider how each guiding principle can help you see opportunities where before only constraints were visible.

1. Do you take all of the conditions as given? 

The conventional way for us in small businesses to develop a strategy is to begin by analysing the environment:

Is the industry growing or shrinking?

Is the competition strong or not?

Most strategies are built on such assessments. In other words, structure shapes strategy.

However, blue sky strategists do not take industry practices as a given. What they recognise, and what most of us forget, is that while industry conditions exist, individual firms created them in the first place. Industry boundaries are not fixed.

This is the perspective that you need in our world of new and bigger challenges.

The pandemic has had a shock effect on economies and businesses and is bound to trigger more changes and disruptions in many industries.

Will you go down as a victim of change and disruption?

Or are you going to rise above the challenges and reshape the business environment in your favour?

A blue sky perspective can be a decisive factor here as it frees you from the shared industry logic that could dramatically restrict your creative thinking and understanding of what is possible and profitable.

2. Do you try to beat the competition?

Most of us are stuck in the trap of competition. Having accepted the structure as a given, we benchmark rivals and focus on outperforming them to achieve a competitive advantage.

The irony is that the more you focus on benchmarking and outpacing the competition, the more your strategy will look like your competitors.

Indeed, every winning company has a competitive advantage. The problem is that when we automatically look to the competition we end up defining the strategy based on the competition.

We should, instead, focus on how to make the competition irrelevant.

In this regard, the pandemic, by changing people’s working habits and lifestyles, has put many products and services to the test.

What are the factors that you thought were important but don’t seem to matter so much to your customers in terms of serving their essential needs?

What are the factors that they fundamentally value and don’t want to compromise on even during this difficult time?

Are these temporary shifts under extreme conditions or do they provide insight into reconfiguring your offerings in a post-pandemic world?

Think through these questions and ask yourself, “What would it take to win over the mass of buyers, even with no marketing?”

You want to create an offering so compelling that anyone who sees or tries it can’t help but rave about it.

3. Do you focus on creating new demand?

Customer satisfaction and understanding customer needs are a priority for any small business.

Most of us regularly monitor customer satisfaction scores through surveys, for example. This can lead to finer segmentation and greater customisation to meet customers’ specialised needs.

But by holding on to a predetermined definition of who our customers are, we are often blind to the wider potential of new demand outside that we could tap into.

In many industries, existing customers are just a drop in the bucket, compared with all the noncustomers who can be reached through market-creating strategies.

Again, the pandemic may have exposed and amplified some of the pain points previously assumed by us.

It is up to you to find creative ways to address them to unlock and attract the mass of noncustomers.

4. Do we reduce costs at all cost?

Where people, are going to be faced with economic uncertainties and living on a tighter budget, we know they tend to be more cautious about their spending and yet more conscious of a product or service’s fundamental value and appeal.

Only those offerings that are both differentiated and low-cost have the best chance to stand out and open up latent demand, thereby helping restore market confidence and contributing to a speedy economic recovery.

This is some stuff I have bene thinking of, and I know Christmas is approaching, but if this year has taught me anything its that we need to try to get ahead of the game with flexibility and new ideas.

I’m going to do so much more this month on Blue Sky thinking. Please don’t get left behind or fall into the Christmas trap. I’ll put the Blue Sky training video up, and if you would like to watch it for free we would love to have you as part of out 'In Cahoots group".

www.facebook.com/groups/incahootswithphil/

You can find my book 'In Cahoots' on Amazon now.