HOW-TO-WIN

The Four C’s in Breakthrough Strategies

In our Intelligence Briefing “How many SIPs does your organization face?” we explained the SIPs, ‘Strategic Inflection Points’. These SIPs are not easy to spot and you can’t hide from them. There are several strategy models that can be used to identify these SIPs: Strategy under Uncertainty, Strategy as Active Waiting, Where-to-Play & How-to-Win, Porter Five Forces and more. We need this kind of strategic models to understand the competitive arenas and to get access how you can best deploy your resources and competencies there.

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We didn’t see it

This statement by Paul van Riel, CEO of Fugro, in the Dutch financial newspaper Het Financieele Dagblad on 30th October, 2014. Fugro is the world’s largest integrator of geotechnical survey, subsea and geosciences services. The company is 70-80 percent dependent on what is going on in the oil and gas sector. In September 2013, Fugro launched its new “Growth through Leadership” strategy aimed at an annual growth of 10 percent in the next couple of years. In the spring of 2014, the first warnings were issued regarding under-performance and pressure on profitability.

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Too many companies like the comfort zone when working on strategy

Choosing a strategy entails making decisions that explicitly cut off possibilities and options. It is a natural reaction to make the challenge less daunting by turning it into a problem that can be solved with tried and tested tools. The strategic plan is supported with detailed spreadsheets that project costs and revenues quite far into the future. At the end of this strategy process everyone feels much less scared; so this is about coping with fear of the unknown.

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Strategic crises occur long before management sees them

The result is the rapidly-increasing pressure on earnings which results in cost-cutting and laying-off people. We read stories like this daily in the media, where top management explains that market conditions have changed, that customer behavior has changed, that new competitors with new business models have entered the market, or that a new technology was accepted much faster than initially thought. Who can we blame for this?

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