“Business is a game, played for fantastic stakes, and you’re in competition with experts. If you want to win, you have to learn to be a master of the game.” ~Sidney Sheldon
Business is a high-stakes game, but counter to conventional thinking, business is not about winning and losing. Nor is it about, how well you play the game. Companies can succeed spectacularly without requiring others to fail. And they can fail miserably no matter how well they play, if they make the mistake of playing the wrong game.
The essence of business success lies in making sure you’re playing the right game. How do you know if it’s the right game? What can you do about it if it’s the wrong game? Successful business strategy is about actively shaping the game you play, not just playing the game you find. A paradigm shift is a change to a new game, and a new set of rules. By changing the rules you can create innovative solutions and new strategies that change industries.
But, innovation without ethics is blind. Ethics without innovation is lame. Innovation in combination with ethics creates value, profitability, and sustainability. However, changing the game is not easy; according to Albert Einstein; “no problem can be solved from the same consciousness that created it”.
In Alan M. Webber’s book ‘Rules of Thumb’ is a collection of 52 truths he’s culled from notes specifically related to winning in business. These were notes, lessons, and insights he gleaned from his experiences travelling the world and in his interactions with people ranging from CEOs and spiritual leaders to basketball coaches, novelists, and stars from dozens of other worlds…
Here is Rule #24: “If you want to change the game, change the economics of how the game is played.” Once you start to look you’ll find companies in every industry that have changed the economics to change the game: from razors to cameras, computers to airlines, magazines to nonprofits. Companies that start by redesigning the economics of an industry often finish by redesigning the whole industry — and owning it. Start by analyzing the status quo: What’s the standard economic model the industry uses today? When you pull it apart, how does it work?
Take a look at it from the point of view of the customer. Exactly what is the customer paying for? And where does the business make its real money? Go back to the fundamental question: ‘What business are you really in?’ Can you imagine new revenue streams that reflect changes going on in customer habits, customer experiences, or customer loyalty? Is emerging technology opening up new ways of connecting; or making customers pine for the good old days when things weren’t so high-tech?
Don’t forget, everyone agreed that retail outlets were dead and all commerce was shifting to the Web. Then Steve Jobs opened up Apple stores with their Genius Bars. There are a lot of ways to reinvent an economic model. But most established companies are unwilling to do it because it would mean destabilizing their own operation. Which is exactly what those innovators and entrepreneurs in the garages and dorm rooms are counting on. Rule #38:”If you want to think big, start small.”
In the blog “Will Your Social Strategy Change the Game?” by Jay Deragon writes: ‘Social media is a game changer’. It is changing how people interact with markets. How buyers influence sellers and how traditional media adapts to this thing we call new media. The dynamics and disruptive nature of all things social are emerging on a daily basis. There is no road map for how to use social media, only temporary roads that are tactical uses aimed at getting attention and awareness. Fueled by creativity these tactics are short dead-end roads; unless there is an overriding strategy that creates new highways (metaphorically) for others to follow and use.
A highway using social media requires deep thinking about the users wants, needs and intentions, and to create a highway where none exist. Doing so takes creative thinking long-term and development of tools and experiences that users find valuable, useful, and serves their intentions. Slick marketing and tactical attempts to get the audiences attention are side roads not long-term highways.
A sound social strategy is one which changes the rules of the game for more than a moment. If you can change the rules of the game and users like the new rules, then competition will have to follow your highway. “If you are not thinking strategically about all this social media stuff you may end up on a dead-end road”.
In the article “Changing the Game” by Haydee Hernandez, Rick Murtha , Micah Peng , Yuhong Xiong write: In deciding how to conduct your business, one of the traditional and most widely accepted approaches of the past twenty years has been to conduct a competitive analysis. Michael Porter formalized this approach with his competitive forces model which identifies five basic forces with which a commercial organization must contend.
This model provides a framework for collecting and organizing industry information. Adding to the game changing strategic fray, Joseph Pine outlined a creative strategy in his ‘Dynamic Stability Model: Mass Customization’. Pine says industries are characterized by their products and their processes. The degree of change in those products and processes defines the kind of strategy the company is pursuing.
So, for example, a traditional production strategy such as ‘Mass Production’ concentrates on generating economies of scale by specializing in standardized, unchanging processes to manufacture cookie cutter products. This represents a low degree of change in products and process and is one alternative route toward Porter’s Cost Leadership strategy.
Another traditional strategy involves Invention in which there are constant changes in processes and products. This reflects a high degree of both product and process change and gibes with Porter’s Differentiation strategy. In the past 30 years Japanese manufacturing companies have championed another strategy known as Continuous Improvement.
These are incremental improvements in an ‘evolutionary strategy’, and their sum can be more significant than the occasional changes brought about by a ‘revolutionary change strategy’. This is another route companies take to achieve Cost Leadership with fairly standardized products. However, as a game changer, imagine a strategy in which you are able to benefit from your ability to customize your products to individual customer specifications while still maintaining the capacity to produce with economies of scale.
This scenario describes a situation in which your products change as needed but you are able to specialize and generate economies of scale by utilizing stable processes: This is Pine’s game changing ‘Mass Customization’ strategy, and it is considered to be outside the realm of Porter’s traditional strategies.
In the article “Competitive Strategy: Game – Changing Strategies” by Bob Tyler writes: Common sense, as well as, academic research argues that attacking bigger competitors will most likely lead to failure. Take for example, a series of studies undertaken at London Business School in the early 1990s which examined; ‘how new market entrants in several UK industries fared against much bigger established competitors’.
Not surprisingly, the failure rate of ‘newbies’ was quite high. More than 85% of them failed within 5 years of entry, whereas a No.1 ranked firm, in a particular industry, had a probability of about 96% of surviving as No.1. Yet, without disputing the statistics, we all know of examples of companies that attacked much bigger competitors with great success. In several instances, not only did the smaller firm survive but often managed to emerge as one of the leaders in the industry.
In other words, the small fish ate the big fish! IKEA did it in the furniture retail business, Canon in copiers, Starbucks in coffee, Amazon in bookselling, and the list goes on… So, what explains the success of these outliers and what can we all learn from their experience? After studying more than seventy such firms Dr. Costas Markides, Professor of Strategic and International Management at London Business School and author of the book ‘Game Changing Strategies’, has found a simple answer; “Successful attackers do not try and be better than their rivals. Rather, they actively adopt a different strategy and aim to compete by changing the rules of the game of the industry”.
In the article “How to Win by Changing the Game” writes: A true capabilities-driven strategy is the most reliable way for a company to thrive when the rules of the game for its industry are in flux. Instead of looking inward at the capabilities you already have and trying to discern your strengths, start by looking outward at the capabilities you need. ‘What must you be able to do to reach the customers you want to attract?’
By designing a portfolio of skills and tools (capabilities) needed to win customers, you can end up changing the game instead of playing by the rules. However, as many senior executives will confirm, this focus on capabilities is easy to write about but surprisingly difficult to execute, especially in highly turbulent times. But the alternative is worse: This is not the time to find a cave and hibernate until the economic storm passes; for its unlikely the storm will pass anytime soon, and a capabilities-driven strategy is the only way to remain equipped for perpetually stormy weather.
Remember that capabilities do not manifest themselves overnight; they take time to grow. That’s why foresight, particularly the ability to anticipate future industry dynamics and customer needs, is so crucial. As you look for ways to foster growth, consider every move through the lens of your ultimate aspiration; your ability to thrive by consistently attracting customers. To achieve that goal in today’s global business environment, it’s not only what you do that matters; ‘it’s how well your business is equipped with the appropriate capabilities’…
Game changing strategies are developed by engaging customers in meaningful dialogue, and asking the critical question: “What can I do differently in my business that would make a real difference to my customers?” The answer(s) to this simple question will give you the stuff that can change the game and provide a significant business advantage. There are dozens of different ways you can change the way you play the game, in your field of business, and you actually have a lot more choice than you think… think about it…
Competing head-to-head on products and services is table stakes. Innovators are looking for a new business model that will destabilize their rivals and produce a breakthrough opportunity. In fact, in a recent survey of top-level executives in established companies found that the biggest shared concern is that somewhere in the world—in a garage or a dorm room— someone is coming up with a new business model that will overthrow their established way of doing business…
“Don’t wait for the business trends to develop. Instead, watch for people messing with the rules, because that is the earliest sign of significant change. And, when the rules change, the whole world can change.” ~Joel A. Barker