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lirik lagu ares (rou) - in the face of change, what should you do?

a peruvian acquaintance recently asked me how to think about strategy in light of the huge upheaval in his company’s operating environment following the election of president pedro castillo, who is both avowedly marxist and a supporter of hugo chávez’ controversial presidency in venezuela. it’s similar to a question i hear a lot: “how do i know when it’s time to change my strategy?” so, for my 50th playing to win/practitioner insights essay, i’ve decided to write on strategy in the facе of discontinuity: to do, or not to do?
the obstacle

eventually, practically еvery organisation will experience some type of disruption. as in peru, a change in government could cause a disruption in the business environment. discontinuity can also emerge as a result of the introduction of new technology, such as the vehicle, transistor, digital switch, or internet. it could also be a new sort of business model, such as the peer~to~peer sharing platforms used by uber, airbnb, and other companies. or the introduction of a new competitor, such as when ge financial entered a number of traditional leasing businesses or amazon enters yet another vertical

it’s tough for a corporation to know what to do when one of these disruptions occurs. it doesn’t want to be in the situation of acting as if the sky is falling and completely abandoning its approach when neither is required nor productive. it also doesn’t want to be the next blockbuster, and it doesn’t want to be remembered as the ultimate case study in burying your head in the sand till you die

is it better to do something or not do something? do you make big changes to your plan, or do you continue with what you’ve got? that is the issue. but how can you tell which one is best for you? regrettably, there is no easy rule to follow. it will always be a judgement call, but the question “what would have to be true?” can help you make that decision. (also known as wwhtbt for short)

returning to your wwhtbt

i like the strategy question wwhtbt because it gives you a snapshot of your approach’s logical architecture. consider wwhtbt to be the plan for your home. making significant renovations to your home without blueprints is difficult, if not impossible, because you won’t know which walls are retaining walls, where the plumbing runs, how the wiring is organised, and so on

the wwhtbt blueprint should be a natural outgrowth of strategy development. laying out the wwhtbt for each option under consideration is an important stage in the strategy selection process. the ultimate strategy option should be based on which of the wwhtbt are more true today and/or are within the company’s ability to make true in the future. when you’ve decided on a plan, it’s critical to save the wwhtbt for that approach since throwing it away would be like throwing away the blueprint for your house after you’ve finished building it ~ which would be insane!

in fact, you should utilise it on a regular basis. before commencing your job each day, double~check that the wwhtbt you compiled at the time of strategy selection is still valid. if it does, the best course of action is to keep doing what you’re doing. when your strategy rationale still holds, don’t tinker with the dials. when a discontinuity occurs, though, wwhtbt becomes even more critical. it can assist you determine out whether the discontinuity just ripped a strip of shingles off the roof or ripped out a load~bearing wall. if it’s the former, you’ll need to rethink your plan because the wwhtbt is no longer valid. if it’s the latter, you’ll probably need to make some changes, but you won’t have to start from scratch

it will always be a matter of opinion. however, the wwhtbt will assist you in making that decision. if you need to rethink your strategy, examining the wwhtbt is a wonderful method to outline the challenge you’ll be tackling with your new strategy endeavour

performing the wwhtbt ~n~lysis

in order to form an opinion on strategy change, you must evaluate each of the seven aspects of the above strategy logic flow

~n~lysis of the industry: segmentation

consider this the market map that your present approach is based on. does your map, for example, believe that the market for ‘natural’ items is so small that you can ignore it and focus on the ‘conventional’ segment? but, based on current statistics, does it appear that this segment is increasing at a quicker rate than any other, causing significant shrinkage in the part of the map where your strategy has decided to compete? if that’s the case, does it suggest you need to change your where~to~play (wtp) strategy before it’s too late?
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structural attractiveness in the industry

this is your strategy’s assumption for the average player in your wtp’s profitability level. has it already deteriorated, or does it look to be on the verge of deteriorating, from the assumed level, as in the case of peru, or because of the entry of low~cost international competitors, or because technology has made it easier for start~ups to compete? how true is the wwhtbt concerning structural appeal now?

~n~lysis of customer value: channel value

what assumptions does your strategy make regarding the channel’s desire for value from you? has this altered in such a way that your method is no longer effective? is your channel, for example, insistent on your commitment to it even if new competitors emerge, such as geico, dollar shave club, or tesla?

end~consumer value ~n~lysis is a method of determining the value of a customer

what assumptions does your approach make about the value end~users expect from you? are they indicating a shift in the way they value existing traits, or are they valuing wholly new ones? perhaps you assumed that your taxi customers didn’t care if their supplier was generally unreliable, but uber has shown that they value far more than knowing when their ride would actually arrive, as your plan antic~p~ted. do car customers value over~the~air software updates now that they know they’re possible, thanks to tesla? what does it mean for your existing value proposition if your customers’ definition of value has shifted?

capabilities ~n~lysis of relative position

what assumptions does your wtp strategy make about your capabilities in comparison to the competition? has any competitor, whether toyota’s elevated quality/reliability/durability (qrd), amazon’s endless aisle, or apple’s itunes, entered with stronger capabilities? what does it signify for your presumed competitive position if they have?

costs ~n~lysis of relative position

in your wtp, what assumptions does your strategy make regarding your cost position in relation to the competition? is there a competitor who has a lower cost structure, whether it’s through low~cost labour, a digital product, direct distribution, or some other method? what does it signify for your presumed competitive position if they have?

predictions based on competitor ~n~lysis

this is the most misinterpreted part of the strategy logic flow, by the way. most people assume it indicates what you expect your competition to do. rather, it’s what you’d have to believe about competitors for your plan to succeed the way you want it to. wwhtbt, for example, it’s possible that your competitors won’t copy your successful strategy because it would eat into their current business
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so the question is whether existing or new competitors have done something you thought they couldn’t or wouldn’t do, posing a danger to your approach. carmax and autonation, for example, may not have antic~p~ted a competitor like carvana entering the market with a new model that threatens theirs. or the credit card firms may not have antic~p~ted a competition like apple pay posing a threat to their business models. what does it signify for the long~term viability of your projected competitive position if a competitor has?

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