Boxing legend Mike Tyson, when asked about his strategy when entering the ring to fight, replied that he didn’t have one. Asked about his opponents, he replied: "It seems everyone has a strategy", adding laconically, "… that is, until they get hit."
Looking around us, we find more and more firms getting hit and being left without a strategy. No doubt, the ongoing economic crisis has been a major contributing factor as business failure and uncertainty have become the new business norms. Success in today’s business environment has become more volatile and transient than ever.
It’s not that business strategists have not coped with demanding competitive environments in the past. By all appearances, however, the recent economic crisis has contributed to the formation of entirely new, "game-changing" rules that are at the root of an emerging "new normal".
This spells out a future that is less certain than it has ever been – "The future ain’t what it used to be", as former US Major League Baseball player "Yogi" Berra so memorably said.
Business leaders and their organisations will need to recognise and embrace the following:
The changing nature of competition
On one hand, companies are competing in an increasingly borderless world, whether in a geographic or industry sense. Once-distinct boundaries between industry sectors such as telecommunications, computing and media are being reshaped into new spheres of competition.
Opportunities and threats
These spheres of competition represent opportunities for some players – and formidable threats to others. A case in point is the smartphone sector: the speed with which once-strong players such as Nokia and BlackBerry have been pushed aside by more recent industry entrants such as Apple and Samsung is indicative of the dynamics at play in this sector.
"Strategy" at a critical crossroads
In the emerging "new normal", firms are struggling more than ever to find a viable strategy – if not to achieve strategic growth, then at the very least to counter threats with more effective defensive strategies. Strategy, the way we know it, has arrived at an evolutionary crossroads.
Consider the fundamental understanding of the notion of "competitiveness". This has been viewed traditionally as the organisation’s "right to win" – the ability of the company to engage in its competitive markets with a better-than-average chance of achieving success by maintaining a competitive edge. This is no longer a given, however. Dramatically shrinking strategic time horizons facing companies are exacerbating any claim, by any player, to a stake in their competitive markets. Playing by the conventional rules of the game no longer suffices when the game itself has changed.
An "unsustainable, temporary" advantage
So what does the above imply for firms’ competitive stances? Consider the notion of "sustainability of competitive advantage". Traditionally viewed as the "Holy Grail" in strategy, businesses increasingly are finding that they are not pursuing "sustainable" competitive advantage, but rather punctuated positions of "unsustainable, temporary" advantage. The notion of sustainable competitive advantage, while still conceptually intriguing, has been relegated to obsolescence in practice.