Models for New Age Strategy

As organisations emerge from the pandemic, there is an absolute need for each one to rethink its fundamental strategic future positioning. Organisations are, of course, still facing very immediate threats ranging from inflationary cost pressures, supply chain issues, manpower and skills availability etc. However, the rethinking that is now necessary transcends these real and immediate issues and goes to the heart of the future nature of each specific organisation.

Rather than traditional strategy approaches such as determining growth models, ‘New Age’ strategy requires a clear management discussion and decision on the strategic nature of the organisation.

Three models are potentially available:

1)?????The ‘market creator’ – these organisations will create new markets rather than focussing on satisfying existing market needs. This requires them to discard much of traditional strategy planning approaches and instead envisage a market where one does not exist today, and then go and create that market. Previous examples of such organisations can be found in the internet innovators such as Facebook, Instagram et al. They leveraged emerging technologies to envisage a new product/service which created its own demand. Technology is often the enabling factor behind the ‘market creator’, but one may also point to service innovators in this area such as the low-cost airlines. Whilst, in this case, there may have been a desire for airline travel, the perception of its lack of affordability was sufficient to deplete any great market demand. However, innovators in a new service delivery model such as Southwest Airlines in the USA, were able to create a new market that rapidly expanded to create a worldwide pressure and opportunity for ‘market creator imitators’ (a subset of the ‘market creator’) to replicate the South West model globally.

2)?????The ‘innovative predictor’ – these organisations identify and respond to inexorable future market shifts to develop alternative ways to satisfying future market needs. Unlike the ‘market creator’, they respond to a known current and, likely growing, future need but do so in a way that will be dictated by the marketplace. Examples of such organisations would be developers of renewable energy solutions, or ‘green’ transportation providers such as Tesla. Their strength is to understand that the solutions provided by existing market will not be acceptable as solutions for the future. Whilst technology innovations will be a key driver of many ‘innovative predictors’, such organisations may also be found in service providers. Historical examples here, may be seen in the growth of outsourcing providers. ???

3)?????The ‘existing respondent’ – these organisations focus firmly on delivering an existing market need through existing ‘tried and tested’ approaches. They probably constitute the bulk of organisations, and whilst they strive for innovation and productivity improvements, they tend to do so within certain set parameters governed by their previous experiences. Such organisations can continue to be successful and often have a lower short term risk profile than either the ‘market creator’ or the ‘innovative predictor.’ However, they are in danger of having a higher long term risk profile, or be suddenly made irrelevant by new technology, service delivery models or even government regulations. They should be constantly aware of the need to look towards becoming an ‘innovative predictor’ and have mechanisms in place to identify the optimum timing for this, or else to consider exit strategies whilst the organisation still has a realisable market value. ???

The importance of recognising which model you will pursue, is that it fundamentally changes how you will approach the three key elements of organisation success, namely:

-?????????Strategic planning and decision making

-?????????Financial planning and resource allocation,

-?????????Future workforce strategy ?

Before committing to the ‘path of least resistance’, and pursuing the track of ‘existing respondent’, each executive team should conduct a short envisioning exercise to establish their desired future model from the above.?Broad based conglomerates may also wish to establish a ‘profile mix’ across their group of companies, based on their risk appetite, in order to establish a blend of ‘market creator’, ‘innovative predictor’ and ‘existing respondent’ entities. Based on the outcomes of this workshop, executives can determine an appropriate set of strategic planning tools and activities to maximise the probability of success in their chosen new age strategy model(s).

The author: Nigel Penny is a strategy and performance management consultant with over 30 years international experience. He works globally with major private and public sector clients and has undertaken consulting assignments in over 35 separate countries. He is an ex-partner at KPMG and ex Vice President of Balanced Scorecard Collaborative. He runs workshops in strategic planning providing both training and strategic intervention consulting, and has recently developed a high impact executive workshop to help organisations on their New Age Strategy decision making.

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