Strategy Tools for a
Shifting Landscape
Michael G. Jacobides
Michael G. Jacobides
This article focuses on how firms in dynamic enviroment
should conduct their turnaround strategy by focusing on a playscript rather
than the normal way on focusing on graphs and numerical data. While statistical
data has been used by firms to set up their strategy framework. According to
the author, this confines the firm to a fixed set of options and it doesn’t do
a great job in reflecting the dynamic business enviroment.
The author states that by having a playscript, the firm can
continue to adapt its strategy and gives the company a flowing story rather
than a rigid strategy approach. One example that this reminds me of is the strategy of Research in Motion(RIM). Rim instead
had such a rigid strategy they believed that their edge in security technology
would always keep them atop. As the author states, many firms fall into the
problem of looking at “still pictures of the future”. As Apple and Google
continued to adapt to the change in the industry, RIM kept reacting to the
industry rather than seeing the “flowing picture”. RIM had a problem of not
quite understanding the dynamic nature of the industry.
The author gives 4 Indications that the firm may be losing
its subplot.
1.
You find yourself needing to justify the value
you add.
2.
You continue linking in the same way to the same
actors, while the sector is being redefined through new providers or
all-in-one propositions.
3.
You believe that your customers still value the same
attributes.
4.
Value is being created by players in adjoining
parts of the process.
The
Article gives an example of Marvel Entertainment, which went from almost
bankruptcy to a $4 billion company in less than a decade. The company was able
to reassess the “actors” in its industry and allowed movie studios to compete
for the movie rights to the comic book characters. In my opinion, the thing
that made Marvel turnaround strategy a great success was that they were able to
see that studios were having problems coming up with new stories. Also it took
the advantage that the technology innovations were at the point were the comic
books stories could be done by movie studios at a reasonable price. This
reinforces the author’s point that the firm must continue to look at the
enviroment to make a successful corporate renewal.
The
author gives three points to make sure that a firm can reinvent their strategy.
1.
Define your sector and playscript.
2.
Rewrite your strategy by rewriting your
playscript.
3.
Future-proof your playscript.
These
are great ways to look at starting the corporate renewal. The playscript is a
great idea because it gives the company a story, which can change and looks at
everything as actors in a play. By defining the sector it forces the firm to
look inward as well as externally to give itself a true position in the market.
In simple words, by forcing the firm to look at itself, it opens their eyes to
reality of the market. Once it begins to rewrite its playscript, the firm can
create a strategy that will allow the firm to find new value in exisiting
actors. The third point, in my opinion, is the most important. A company must
future-proof their playscript. By looking into the future, this allows the
company to continue to shift its position in a dynamic market. It also allows
the whole company to have an input as well as the firm can be ready to shift
their company in a different directon if needed.
This
was a great article when it comes to Corporate Renewal in a dynamic enviroment.
While it mainly focus on reshifting the firm’s strategy,it must be the first
thing that a firm must do when its looking to change. In my opinion, that is
one of the biggest problems that many companies have. Firms want to change but
they want to get results without looking at what is wrong with their company.
In RIM’s case I believe they forgot to write a playscript, in which they
defined the sector. RIM knew it wanted to change but it was still stuck in the
belief that their security technology would alone carry them. Their rigid
strategy crippled them to the position they are in now, in which they are just
reacting to what other firms do.
Reference:
Jacobides,
Michael G. (2010) Strategy Tools for a Shifting Landscape. Harvard Business
Review, 88(1/2), 76-84.
Good article. This article reinforces the importance of having and creating a strategy that is able to take the future into account. We have seen the pains that many companies go through when they have to change their strategy completely just to stay relevant. If a company needs to shift their strategy, they will be better off in the long-run A simple shift of your strategy could help a company retain their competitive advantage. A complete overhaul of your strategy means you have lost any advantage you might of had. I think RIM is going to have to start from scratch with their strategy just to remain in the game.
ReplyDeleteMark, I agree with you. Companies must always be looking into the future. I guess the firm must be too "arrogant" and believe they will be always be at the top of their game. However, it must not be all they think but it should be something that they keep in mind.
DeleteRegarding, RIM must have a complete overhaul to try to stay in the game. I think at this point it is nearly impossible to achieve a change.
Good article and its very true and close to what we are living with these days even with our simulation game. It is amazing to complete extensive analysis of own operations and performance before comparing with competitors.
ReplyDeleteYes, the first thing that came into mind was the BSG. It has been seen that all four companies have changed or "tweaked" their strategy thru every turn. It seems that the market is very reactive to a change by one firm. I believe our small BSG does a great job in reflecting real world market enviroment.
DeleteInteresting article Jose! Defining sector and rewriting strategy are two important factors for the company to lead in the market. In our class discussion few weeks ago we discussed that company's who maintain laser like strategy succeed but this article is a good example to show that if company's maintain laser like strategy and don't rewrite it, it is less likely they will succeed in near future.
ReplyDeleteYeah I think focusing on something may have its benefits but at the same time it may hurt them in the future. That's the thing that drew me to this article because at times firmsmay focus too much on what is happening at the moment and may see the future as something that they'll deal with when they get there.
DeleteInteresting! Many companies may ignore the problem of writing a playscript to look at flowing pictures of the future. Corporate Renewal does happen in a dynamic environment, so firms need to look to change while transiting strategy. It is not just to be base on fixed numbers or historical data, but to rely on the dynamic nature of the industry.
ReplyDeleteYeah, I think firms may focus too much on the numbers at times. This in turn can cause them to be a bit more restricted on what strategical changes they can mak. The article brings a great point that by having a script, it can be a more "flowing" strategy.
DeleteI think that many companies need to revist their current strategies and make sure that they are actually competitive in current markets. RIM was discussed in your article and I think they are a good example for sticking to a failing strategy. I think it is important for companies to readdress this issue, instead of just reacting to the market. They need to be more proactive.
ReplyDeleteGood article Jose. I think it all depends on the culture of the company. If the top level management is open towards new ideas and is willing to see the broad scope of the business rather than a narrow area, they will get a feel for what might happen and can tweak their strategy depending on the what business require to get competitive advantage
ReplyDelete