The Hidden Dangers of Strategic Success
Over the past several weeks, I have had the privilege of working with very successful business 
leaders at very successful, established organizations as part of my work developing Business Acumen skills. Business Acumen is a critical competency in today’s volatile, uncertain, complex, and ambiguous business world. In every Business Acumen training workshop that I have conducted so far this year, we utilize sophisticated business simulation to develop and practice new skills. As part of our debrief and review process, we analyze the data from the simulation exercises to identify trends for research, make our simulations better, and help our clients notice tendencies in behaviors that could lead to the addition of further skill development.
In reviewing the analytics from workshops delivered in 2017, I have noticed a statically relevant and interesting trend:
Established leaders at established companies spend more time focusing on sustainability of established brands than they do focusing on enhancing the value proposition of what got them to a leadership position in the first place.
In one of our core business simulation platforms, AGES™, participants take over a portfolio of established and new products. They are able to choose a new value proposition to customers that creates differentiation and enables their simulated organizations to achieve various metrics of success. More than 85% of the time, established leaders in established companies with established products continued to invest in Marketing, Sales, and service to support market share instead of investing in innovation and R&D to either launch new versions of existing products or bring new and enhanced products to market.
Think of it this way; instead of Apple launching the iPhone 2, 3, 4, 5, 6, and 7, they decided to stick with the iPhone 1 and try to convince customers of smartphones that the iPhone 1 was the best in the market through tons of marketing and salesmanship.
Now here’s where it gets interesting. I then went back and took a look at the data from new leaders working in newer companies with newer products. The result was almost the exact opposite. They invested heavily in upgrading and launching new products and used marketing investment to create awareness, not just sustainability of the brand. In some cases I can share that their decision making bordered on recklessness as they were bringing new products to market faster than their customers could absorb, but they were true to their strategy and focus.
So essentially, if you are an established leader at an established company with established products, you need some “strategy awareness” to make sure you aren’t becoming complacent.
Here are 3 key learnings for Business Acumen application:
Don’t forget your value proposition to your customers; being defensive will hurt you
No matter if you are the low cost play, the customer focus play, or the innovation play executing the right strategy to the right customer segment helped you achieve success. Don’t stop and don’t forget what got you there. Becoming defensive and trying to sustain share on yesterday’s value proposition will hurt you in the long run and possibly put you out of business.
Benchmark your competition and determine if they are being defensive or proactive
You have other competitors in your market and they also have a value proposition they are fighting to deliver against you. Establish regular benchmark intervals to see how they are doing and the degree to which they are focusing on sustaining their brand vs. growing their brand. In either case, it is a signal to you and your strategy on what to do.
Listen to your customers, they will tell you what to do
All too often large, established companies stop listening to their customers because they have all of the answers. Don’t let that be you. If you are stuck between sustaining your brand and growing it, ask your customers because in this case, they will have the best answers.
