The hallmark of a “wicked” situation is a rapidly transforming business environment in which established models of profitability and success are undergoing unpredictable changes, according to John Camillus in his book Wicked Strategies: How Companies Conquer Complexity and Confound Competitors. These complex, intractable and threatening wicked problems cannot be addressed by conventional strategies; instead, wicked problems require wicked strategies.
There is absolutely no reason upstart digital companies have to supplant established firms. There is no reason new businesses have to be the only engines of innovation. The problem, according to David Rogers in his book The Digital Transformation Playbook: Rethink Your Business for the Digital Age, is that—in many cases—management simply doesn’t have a playbook to follow to understand and then address the competitive challenges of digitization. This book aims to fulfil that role, helping you understand, strategize for, and compete on the digital playing field.
The processes and incentives that companies use to keep focused on their main customers work so well that they blind those companies to important new technologies in emerging markets, and this leaves established companies vulnerable to new entrants who start by using the new technologies to target the low end of the market and gradually work their way upward to squeeze out incumbents in the profitable part of the market. That is the process of digital disruption for which Clayton Christensen is best known, and which is described in several articles in The Clayton M Christensen Reader.
Most companies fail to create a compelling strategy, or if they do have such a strategy they fail to put it into practice; however, a small number of companies naturally combine strategy and execution in everything they do. According to Paul Leinwand and Cesare Mainardi in their book Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap, the products and services of these companies have an enviable position in the markets they care about, and the firms reliably deliver on their promises. They each have their own unique way of competing, but they all have one thing in common: their success is clearly related to the distinctive way they do things: their capabilities.
Today, strategy in business has fallen into disrepute; the expensive large-scale strategic planning exercises that were common in the late twentieth century are no longer perceived as providing commensurate returns in terms of contributing to the firm’s success. What really sealed the fate of these exercises was the fast-changing, increasingly dynamic and complex business environment, according to Johan Aurik, Martin Fabel and Gillis Jonk in their book The Future of Strategy: A Transformative Approach to Strategy for a World That Won’t Stand Still. Nonetheless strategy, when properly understood and executed, has never been more important.
In the decade since the first edition of their book was released, the ferocity of competition in existing industries and the pressures on costs and profits have only intensified, according to authors W Chan Kim and Renee Mauborgne in the latest incarnation of their best-selling book, “Blue Ocean Strategy Expanded Edition”. That is why there is a rising call for creative new solutions and such an allure in the idea of escaping from cut-throat “red ocean” markets into competition-free “blue ocean” market space.
When the world is in chaos and business conditions are changing rapidly and unpredictably, conventional strategic planning processes no longer seem to work. However, instead of abandoning strategy, we need it more than ever, and we need to build strategic shock absorbers into our planning processes, according to Jeffrey Sampler in his book Bringing Strategy Back: How Strategic Shock Absorbers Make Planning Relevant in a World of Constant Change.
Understanding markets (and not just marketing) is vital to competitive success, as is being able to recognize what the company must do corporately to develop its ability to compete in markets. The company’s products and services must be put into the context of the market rather than the company seeking to put the market into the context of the company and its products and services, according to Malcolm Morley in his book Understanding Markets and Strategy: How to Exploit Markets for Sustainable Business Growth.
Your business will be humming along when a tremor suddenly hits. In fact – and this flies in the face of instinct – when trouble looms, usually in the form of pressure for short-term growth, that’s exactly the moment to make bold bets, according to Sanjay Khosla and Mohanbir Sawhney in their book Fewer, Bigger, Bolder: From Mindless Expansion to Focused Growth. Getting to the point of quality growth is the endgame, and to do this you have to identify a very small number of high-potential areas to invest in.
Intel’s greatest strength has been its willingness to take huge risks, even betting the company, according to Michael Malone in his book The Intel Trinity: How Robert Noyce, Gordon Moore and Andy Grove Built the World’s Most Important Company. On the occasions when those bets have failed, the company has clawed its way back into the game through superhuman effort and will,… and then immediately gone on to take yet more risks.