Rethinking Strategy

How to anticipate the future, slow down change, and improve decision making

Steve Tighe

• Publisher: Wiley
• Year: 2019
• Print ISBN: 9780730368335
• eBook ISBN: 9780730368373
• Edition: 1
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Seize opportunity from uncertainty

What if you could use strategy to turn market volatility to your competitive advantage? Rethinking Strategy shows you how to anticipate and benefit from emerging market shifts and free your organisation from a cycle of disruption and response.

In this ground-breaking book, author and strategist Steve Tighe helps you use scenarios to envisage what your industry and organisation could look like in the future and prepare for what's to come. Through detailed case studies and practical tools, this guide reveals how to make strategy development your organisation's principal creative and learning activity.

• anticipate impending market shifts before they emerge
• slow down change by making the future familiar
• unlock the entrepreneurial talent that lies within your organisation
• mobilise an army of internal advocates to drive strategy execution
• embed foresight into your planning and innovation processes

Have you ever wondered how some companies seem to always be ahead of the curve while others struggle to keep up in today's ever-changing competitive environment? With Rethinking Strategy, you'll learn how to make better decisions and thrive alongside increasing competition and uncertainty.

PART I
SEARCHING

CHAPTER 1
The trouble with trends

Information must illuminate future discontinuities to deliver strategic value

Businesses love trends.

Trends make life easier for planners, marketers and innovators because they provide the illusion of a safe framework to which they can attach their plans and initiatives. In a sense, trends do the hard yards by defining the domains for exploitation. Once this heavy lifting is done, it’s then up to the skills of the business to exploit the obvious. The trouble is, all of your competitors are likely doing the same thing.

I first became aware of the corporate love for trends when I was appointed Consumer Insights Manager at Foster’s. Charged with the responsibility for assisting marketing decisions including innovation, this role was my first real exposure to consumer and social trends. And I was soon able to see first-hand the influential and often central role that trends play in business decisions.

One of the first jobs in my new role was to develop a set of consumer trends that would act as a guiding framework for marketing and innovation — a corporate version of the ten commandments, if you like. After locking ourselves away for a couple of weeks, my colleagues and I came down from the mountain brandishing a list of trends that would surely take us to the promised land. We beamed with pride at what we thought was the originality of our trends and the creativity with which we had named each one: Keeping it real described the consumer’s desire for authentic products and experiences. Time as currency captured the increasing value consumers placed on convenience due to a lack of time or energy. Gender blending spoke to the breaking down of traditional male and female stereotypes.

Little did we know, rather than place Foster’s at the forefront of global innovation, what this set of trends actually did was to position us smack-bang in the middle of corporate mediocrity. Despite our initial hubris, you could be sure that every major consumer goods company in the world had a similar list of social trends guiding their marketing and innovation. Furthermore, our attachment to these trends only made us more vulnerable to more significant, less obvious changes emerging around us.

Trends are not enough

Trends essentially represent a noticeable shift — an emerging pattern of behaviour that is different from the established activities of society or an industry. To a business, trends often represent a change in the attitudes, preferences or behaviours of customers or consumers. As opposed to fads, which can come and go quickly, trends tend to be sustained, often representing fundamental shifts in the market.

And this is what makes trends important. Organisations must respond to trends or risk losing relevance with customers. This means constantly adapting what you do or how you do it to remain in harmony with evolving consumer preferences. At Foster’s, the most senior management at the time even had a saying that was repeated throughout the company: ‘The trend is your friend.’ The message in this axiom was clear: follow the trend.

The danger, of course, is in relying too heavily on trends as a guide to the future.

The deceptive friend: The comforting future-as-written impression provided by trends leaves many organisations unprepared for imminent discontinuities.

It soon became apparent that trends also have significant limitations, especially with regard to their usefulness for (1) providing competitive advantage and (2) illuminating future market shifts.

1. Trends don’t provide competitive advantage. The very fact that they are noticeable suggests there must be mounting and measurable evidence of change for a trend to exist. And this is the usefulness of trends: their visibility provides a guide for planning and innovation. But this visibility is also a weakness for organisations, because if we at Foster’s were innovating to the latest social trends, then you could be sure our competitors were doing the same.
   The resulting convergent behaviour that trends promote is akin to moths being attracted to a flame. Pretty soon every player in the industry is innovating to the same reasoning, until a new norm is established. In this instance, trends rarely provide a competitive edge — unless you are the first to take advantage of them, in which case you’d be acting upon weaker signals. If all you are doing is responding to trends, then you’re back with the pack.
2. Trends are deceptive. They convey a comforting future-as-written air that can provide the illusion of stability to all who worship at their altar. This comfort is deceiving because trends don’t last. Sure, some trends last longer than others; some may even persist for decades and beyond. The future is never simply a linear continuation of the past, however, and sooner or later a significant discontinuity in the form of a fundamental market shift will emerge.

In today’s world, these discontinuities are increasingly common and relying on trends fails to prepare you for their impact. Instead, a business-as-usual environment is assumed, and strategy is designed for an extrapolation of today’s conditions (see figure 1.1). This lack of preparation for change is now your Achilles heel and inevitably leads to change being experienced as disruption — a significant shift in the organisation’s operating environment for which you are unprepared. Examples of disruptive change are all too common today but few have been as public, as painful or as sudden as the crisis that enveloped the Australian live cattle export industry in 2011.

Figure 1.1: ‘trends exist in the past’

My colleague Marcus Barber helped me to see trends in a new way by proposing that ‘trends exist in the past’. So ingrained was our future-oriented view of trends that at first this observation seemed counterintuitive.

Before 2011 the industry had experienced a sustained period of growth in exports to Indonesia, a trend that was forecast to continue. However, in May 2011 the ABC’s current affairs program Four Corners exposed cruelty inflicted on Australian cattle in Indonesian slaughterhouses. This led to a major public uproar and an immediate ban on abattoirs featured in the program, followed by a six-month ban on all live trade to Indonesia. The forecast growth trend, upon which industry members had based investment decisions worth millions of dollars, was immediately rendered worthless. Overnight the once prosperous industry was brought to its knees, and years later it was still trying to recover.

If the purpose of strategy is to exploit opportunities in order to achieve future goals, then the strategic value of information is in its capacity to illuminate plausible and significant future market shifts. It’s within these shifts that new strategic opportunities reside, providing gateways to a step change in performance (see figure 1.2). Significant market shifts don’t come along all that often; you want to be prepared for them when they do, and drive them when you can. If all you are doing is planning for a business-as-usual future, then ‘the value of forecasts is very little’.¹

Figure 1.2: failing ‘when they are needed most’²

Traditional forecasts fail to anticipate the significant market shifts that can deliver a step change in organisational performance. (Source: Adapted from Igor Ansoff.³)

As the limitations of trends and forecasts as a source of insight into the future became clear, I realised there had to be more effective ways to approach strategy and innovation. Driven by an equal mix of curiosity and corporate competitiveness, I began to explore a question that would lead me to the emerging field of strategic foresight.

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Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Acknowledgements
• Introduction empowering your organisation
• Part I Searching
• Part II Learning
• Part III Doing
• Endnotes
• Index
• End User License Agreement