Its the last quarter of the year, everyone’s planning for 2017. But whose strategy is going to hold in the coming turbulent year.
Strategy is often times confused with planning, but strategy is much simpler, it defines the long term direction of an organisation.Its not just what you intend to do, but must also be clear on what you will not do.
My imagination was captured by this article on the demise of Kodak at HBR, that is a must read for anyone in business. Kodak’s downfall wasn’t about technology. Their problem wasn’t that they had not identified the shift to digital, they had in fact invested billions in a new range of digital products.
Their problem was in doing the right things. Which can also be said to be a question of strategic drift, that tendency for strategies in an organisation to develop incrementally on the basis of history, but fail to keep pace with a fast changing environment.
More recently also in the news is Ericsson’s decision to lay off nearly 3,000 workers in Sweden, and close to 900 contractors. Ericsson said the layoffs are a necessary part of its transformation to meet “fast technology shifts and the digitalization of the telecom industry.”
Put simply, Ericsson is struggling in an area it once had dominance. The markets they dominated are now in the hands of the likes of Huawei and ZTE, very strong Chinese contenders.Read more here.
I can’t help but draw parallels with Kodak’s story. Nokia, Yahoo. Do you have a strategy that clearly differentiates from competitors? How long will that difference last, in a fast changing operating environment ? Are you wired to see and embrace disruption ?
To quote the HBR article “The right lessons from Kodak are subtle. Companies often see the disruptive forces affecting their industry. They frequently divert sufficient resources to participate in emerging markets. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up.”