Strategy Isn't a Google Maps Route
The 'A to B' Metaphor as an Example of Linear Thinking
In strategy, there is no point A – where you are, and point B – where you want to get.
This approach only works if you're planning an outdoor picnic.
Analysis paralysis
In 2017, I joined a board of directors as an independent director. The chairperson said they needed a fresh pair of eyes.’
The very first meeting I attended was devoted to the company’s strategy.
The CEO presented the slide deck, which I found very convincing. The team answered all the crucial strategic questions.
But others were slow to applaud.
‘I believe the current situation hasn’t been analyzed carefully,’ said the chairperson. Other directors agreed (except me).
We saw a more detailed analysis at the next meeting, but it wasn’t enough for the board members.
After the fourth meeting ended the same way, I decided I had enough and quit.
They didn’t need ‘a fresh pair of eyes.’ They needed therapy for analysis paralysis.
Analysis paralysis is a serious corporate disease. You may notice its symptoms when you see managers who can’t make a decision because they eternally claim they need ‘some more data.’
If analysis helped make business decisions, stock analysts would commute on private jets.
Analysis paralysis is an acute form of the disease. But when executives waste their time analyzing point A to build a plan to get to point B, they are also seriously infected.
Strategy is not a route
We have discussed the problem of point B in The Plague Of Strategic Goals. But what’s wrong with point A?
When you set the route to your cousin's house, you believe the landscape won’t change. The highway you are supposed to take won’t change its mind and turn right instead of left.
The mountains and rivers will be precisely where they are on the map.
However, every business is a value ecosystem embedded in two higher-tier ecosystems – market and society.
A value ecosystem is a space, open like a market or closed like a company, where people exchange different value types. We talked about it in the Goodbye, Strategic Planning article.
The difference between an ecosystem and a map is that the former is changing constantly. It causes four problems.
1. There is no point A. It is only a snapshot, a static image of the highly dynamic system.
2. When you analyze point A, you see the current state of the system that reflects the decisions made months ago. For instance, you see products your competitors developed years ago and offer today. But you can’t see their pipeline and don’t know what they pull out of their hats tomorrow.
3. Setting the route is impossible if the starting point constantly changes.
4. The development of the systems is non-linear. Knowing much about point A won’t help us understand point B. Read old forecasts of reputable analysts, and you’ll see how often they make mistakes.
Plotting routes from A to B in such conditions is like planning a wedding ceremony for your kids when you're not even married yet.
Market analysis and 'industry maps' are a waste of time. It tells you a lot about our competitors' past decisions and little about what you should do to change your market position.
SWOT analysis is a waste of time. Discussing your strengths and weaknesses is an exchange of opinions about what you're good at and weak at.
Comparing ourselves with competitors is a waste of time because it won’t help you create groundbreaking products.
Analyzing point A can be useful for assessing resources for development. However, it is better to do this on a more focused, short-term level. There are always more resources than we can utilize.
But there are two questions about the current situation we should ask.
Two magic questions
The first question is, “What customer needs aren’t met?”
As we discussed here, there are no markets, there are customers.
Static market maps don’t reflect customers' needs or the number of customers who are dissatisfied with the available solutions.
For instance, video streaming market maps portray Netflix as an undisputed champion.
But let’s look at some other numbers.
Some 36% of Americans surveyed in the 2024 Digital Media Trends report from Deloitte say subscription video-on-demand isn’t worth their price.
“About one-quarter of U.S. subscribers to major streaming services…have canceled at least three of them over the past two years. Two years ago, that number stood at 15%.” (source)
“Visits to piracy websites have increased 12% in the past four years.” (Source)
Users don’t want to subscribe to 11 (!) various streaming platforms to watch any show they want. They need ‘Spotify for videos.’
Do you still think Netflix is that successful? By the way, I’ve recently canceled my Netflix subscription.
The second question is, “Why aren't customers ecstatic about our products?”
We need this question to learn what processes, or Value Waves, in our company work in a way that hinders us from creating exceptional value for our customers.
If you’re not in a commodity business where rivals sell truly identical products, market mapping and SWOT analysis will require much time and effort but add little value to your strategic discussions.
Bonus tip
From now on, I will include a small nice bonus at the end of each article. It will be one business term translated into the most essential language in business — the language of needs and values.
Today’s term is profit.
Profit is a symbolic bonus from your customers for satisfying their needs and creating exceptional value for them.
Do you know that you can chat with me here? Don’t hesitate to asking your questions!
Read also: Innovate Like Crazy.
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Thanks again for the post. The bonus at the end is a nice touch.