Friday, 23 September 2011

Thorough, but safe

I was asked to review the strategy of a well established firm earlier this week. The headline of my review feedback was 'thorough, but safe'.

'Thorough' referred to the quality and depth of their strategic analysis. They'd collected a lot of data on almost every aspect of their business and its competitive environment, they had analysed it thoroughly and presented it in a meaningful narrative. So far, so good, I thought.

But then they went 'safe'. They concluded, at the end of the analysis, that the impact of all of the threats and opportunities they'd identified would probably be minimal. They suggested, that despite all the trends and change they'd analysed, things would basically continue as they were.

As a result, their strategy was broadly to carry on doing what they were doing, and to hope that they could pick up a few points of market share if any of their competitors slipped up in any way.

Playing it safe is a great strategy in a safe industry. The trouble is, I've never really encountered a safe industry, and this certainly wasn't one. Playing it safe is fine if all of your competitors are also playing it safe and your customers are happy. But they are not: your competitors are out to destroy you; your customers are rapidly becoming bored of your product and looking around for more. Like a shark, if you stop swimming, you die. (Yes, I am aware that is not quite true of sharks, but it makes the point, I think.)

It struck me that even if this executive team thought that there would be no significant impact from the many threats and opportunities in their competitive environment, shouldn't they at least consider what would happen if there was? Shouldn't they at least put contingency plans in place for what they would do if things did change? Shouldn't they plan for a preemptive strike before their competitors went after their market share? Shouldn't they surprise their customers with some new innovation before they get the chance to get bored with what they're already getting? Shouldn't they do something - anything - other than just playing it safe?

Coincidentally (or perhaps synchronistically) I came across this TED Talk this week as well. It's worth watching Seth Godin explain why 'safe' is the new 'risky' and why it is necessary to be 'remarkable'.