Over the years, I’ve seen more than 20,000 opportunities considered. Most have been rejected for good reasons, but many have been pursued and successfully captured. Recently, I spent some time pondering which kinds of opportunities have led to the greatest successes.
There are a few key features which tend to distinguish the best opportunities. They are not, usually, the first ones you think of. In many cases, they come only after discussion of some seriously bad ideas. This is why we have a no-holds-barred brainstorming session as the beginning of the opportunity generation process in Simplified Strategic Planning.
Another feature of many great opportunities is that they are often bold strokes in the direction of your strategic competency. The best opportunities either capitalize on the unique way in which your company creates value, or they actually add to the uniqueness or the value of your competency. This, of course, requires a good understanding of your true strategic competency, and, in some cases, may just highlight the fact that your perception of your competency is too broad and mushy. Regardless, big improvements in uniqueness can yield explosive market share growth if the uniqueness is perceived and appreciated by a chunk of your market.
To go a step further, some of the best opportunities have actually pushed the company to uncomfortable limits in exploiting its competency. In a few cases, this was the key to survival in a company whose core technology was displaced by some new product or service. In every successful displacement survival I’ve seen, we found a way to apply the company’s strategic competency in a way that is compatible with the displacing products or services. The biggest difficulty you will encounter in such situations is that the people in your organization are likely to feel unease and have strong resistance to the new direction, so this approach usually only works when the organization recognizes the size of the threat it’s facing. Unfortunately, the decision to embrace a new direction often comes too late, with too little commitment, for many companies.
While I’m not a fan of commodity strategies in general or cost cutting as a specific opportunity, I have seen a few companies achieve excellent success by completely changing an important part of their cost structure. This isn’t for the faint of heart, and it often revolves around re-defining your approach to sales or distribution, but it can be a life-saver in the face of serious market share erosion. Unfortunately, you can’t achieve this through incremental cost-cutting and belt-tightening. The successful approaches always include a highly disruptive change in the way your products or services are created, sold or distributed.
Finally, blurring the distinction between service and manufacturing businesses can be a brilliant approach. Making a product look more like a service – or making a service look more like a product – can both distinguish you from your competitors (who probably tend to think like only service companies or manufacturers) and draw profitable market share from specialty thinking customers.
Opportunities are one of the most critical elements in the strategic planning process. The success you experience five years from now will likely be rooted in the significant opportunities you embrace in your strategic planning this year. How is your strategic planning driving you to the best opportunities?
To learn more aboutbways to take your strategic planning to the next level please listen to our webinar: Why my strategic planning isn’t working.