Companies must work to improve their vigilance, versatility and velocity
the 3Vs to success
The misfortunes of giants such as Kodak and Nokia have shown that deep pockets and cutting-edge research count for little unless allied to strategic nimbleness.
Many organisations, from Polaroid to Sony, have become victims of their own success: they achieved enormous growth by introducing new products – the Polaroid camera, the Sony Walkman – but as the marketplace matured this growth slowed and they were left looking for alternative paths.
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With companies now exposed to unknown and remote competitors, game-changing technologies and sudden shifts in market conditions, being able to reinvent the core business has become critical to maintaining competitive advantage.
Vigilance: Facing reality
The first barriers to strategic nimbleness are the “organisational blind spots” that develop over time. Common traps include misjudging industry boundaries; failing to identify emerging competition; falling out of touch with customers; over-emphasising competitors’ visible competences; and allowing corporate taboos or lack of foresight to limit the frame of reference. Any one of these mistakes will prevent senior executives from integrating the right information into their thinking or spotting unforeseen opportunities.
Versatility: Creating options
Companies sometimes come up with new insights or ideas, but hesitate because of the level of resources required and the risk of failure. Piloting a strategic initiative in one part of the organisation allows for exploration before reaping the benefits across the entire company.
To prepare for strategic shifts, companies also need people on the top team with different perspectives, experiences and talents. That way, as competitive realities evolve, companies can line up the management team or leader best equipped to tackle the next strategic challenge.
Velocity: Re-organising for speed
Grabbing key opportunities often boils down to speed of decision-making inside the firm – and that may require changes to structures or processes that have grown too rigid.
Finding the right balance and organizing for this speed is emerging as a competitive advantage. Looking at different activities, back-office functions like HR admin, finance, procurement, and IT can be standardised by taking advantage of shared services.
These are not one-off choices, but require an on-going balancing act.
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The quest is to move away from the business unit and functional silos, and gain the desired economies of scope or scale.
Spurred on by enterprise IT initiatives and process standardisation programs, many firms are now feeling leaner and more efficient, but these benefits have come at the expense of local flexibility and agility.