Conventional wisdom has it that sitting still is a strategic disaster – especially in high tech, but also in more mundane industries. As with many chestnuts I hear in strategic planning meetings, this one is both true and false. It’s true because the world will continue to move on with or without your company – and your customers don’t really care whether you are ready to come along with them. In technology markets in particular, many customers won’t wait for your company to get new technologies right – they will simply jump ship to whatever the latest and greatest provider is supplying (and if you doubt this, ask the folks at Research In Motion, whose Blackberry phone was the pinnacle of geekdom just a few years ago, but is now known as “the phone your employer makes you use” by those who still have them).
On a more profound level, however, there is a very delicate balance to be found between rushing forward into the new and really getting the value from what is already working. In the Blackberry example I just cited, I stuck with my Blackberry for two or three years longer because I liked the way the device fit my needs. I still miss being able to type without looking at the screen, which – of course – you cannot do with the latest touch screen phone models. I suspect many, many Blackberry users – past and present – feel the same way. But this does not stop people from shifting to other suppliers – it merely increases the perceived cost of shifting. And there is the rub – because so many people shifted to an entirely new form factor, almost all new smartphone models –including Blackberrys – are designed as a touchscreen, candybar shaped phone. This leaves customers who prefer an actual keyboard with far fewer options today. It also makes Blackberry a “less-than-me-too” product, with a limited market, a poor result for RIM.
Smart phones are not the only products that suffer from over-acceleration. Take a walk through a toy store, and you’ll be struck by how few of the products that were popular ten years ago are available today. In many markets, new is confused with better. From a strategic perspective, this isn’t just hogwash, it’s strategically very dangerous. Many companies succeed with a very specific value model, and have great difficulty shifting into a new model – but feel compelled to do so because pundits tell them that innovation is the key to profitability. Innovation is important – and in some industries, it’s a vital part of the value model – but it is not a substitute for really understanding the needs and preferences of your markets. Whether you are developing real estate or designing packaging, it’s vital to really get inside your customers’ heads and understand what keeps them up at night. It’s also vital to get why some customers like your company – and to assure that your strategy doesn’t eliminate that value in favor of innovations your customers don’t really care about.
Where does your company stand in this world? Are you over-accelerating or under-accelerating in your strategic planning? As always, I’d love to hear real-world examples and issues you may be facing. And if you’d like to explore this concept further, feel free to contact me at .