How do you know whether an opportunity is worth seizing?
Are you overwhelmed by the relentless wave of of opportunities and innovations? Often we perceive so many as growth drivers that we struggle to turn them down.
How you choose to focus resources defines how strategic you are. We’re not talking about a page on PowerPoint, but how you take action and deploy your people, time and money.
It is often easy to chase the competition, the next vertical, or a new fad but are you actually using the strengths of your business to focus and deliver sharply?
We see people falling to either side of the line:
The opportunity hunters who seek and find opportunity everywhere and refuse to turn it down.
- believe the direction needs changing
- rapidly change the target customers and markets when they do not see immediate traction
- obsess over the competition
- look for the next ‘big idea’
The strategic archers whose focus is so narrow that they fail to recognise that the context is ever-changing.
- shoot down new ideas as ‘distractions’
- miss obvious issues and changes in the market as they ‘stick to their guns’
- dismiss people with new ideas as not being willing to work at the ‘old strategy’
What are the implications of these biases?
Often businesses driven by opportunity hunters stretch too far:
This can lead to a huge proliferation of brands and products, some of which are successful and effective, but others are disconnected from the point at which the brand is anchored. For example, Virgin is a brand anchored in challenging the status quo of ‘boring’ industries. Its bridal wear venture was a step too far: the customer could not associate the brand with her special day, and in any event, the market was not appropriate for disruption. This meant that the rebellious Virgin did not have much to fight.
Often businesses driven by strategic archers fail to recognise a shift in context:
For example, Blockbuster was held down by its asset base. It misinterpreted the highly necessary strategic extension of its offering by continuing in linear fashion, and only providing more food and concessions.
Blockbuster did not recognize the way in which power was shifting to the consumer. If it had had a ‘WHY’ and that had been to ‘entertain the nation’, it would have been observing its customers and recognizing that the brands they dismissed as competition were, in fact, stealing mindshare. Blockbuster could easily have embraced its role as a future competitor to Netflix. However, Blockbuster was so focused on what it was doing, that it missed why it was doing it.
So how do we balance opportunity with the risk of getting side-tracked? How do we balance finding the next ‘big idea’ with sticking to our strategic plan?
We believe it is time to think about being an instigator:
Someone with an eye for opportunity but faces the reality of the market in which they are immersed.
These people and firms have a good instinct and a challenging approach that means they identify where they have the right to win versus the right to play:
The right to win is about an understanding of where they are anchored as a business, proposition and brand. There should be a ‘perfect storm’ of characteristics that mean they win.
The right to play is an area ‘close enough’ to their right to win, but one in which the drivers are different. An example of this is an emerging software solution for hedge funds that may add value to Private Equity – this might be where they can play, but their focus might remain where they can win.
It is time to consider where you and your team stand:
- Do you know where to draw the line?
- Have you stretched too far?
- Does your winning strategy make you or break you?
- How are you reconsidering your focus as the ground beneath you shifts?
- How clear are you on where you win vs where you play?
We wrote this because helping CEOs and Founders know where they stand when it comes to these questions is inherent in what we do and why we get up in the morning.