The best selling authors of the book – Blue Ocean Strategy, recently sent an email in which they speak about the 4 pieces of advice they give to their customers on how to build resilient growth for their organisations. Here are the 4 pieces of advice.
1. Focus on building a healthy, balanced portfolio of market-competing and market-creating strategic moves.
Both are important. While market-competing moves generate today’s cash, market-creating moves ensure tomorrow’s growth.
2. Don’t wait for growth to slow to make market-creation a strategic priority.
Prepare in advance. You’ll be buffered by your market-creating move in a downturn cycle only when your market-creating move is already launched or set to launch. Don’t wait. Act now.
3. Ensure your market-creating efforts are a core component of your strategy.
It shouldn’t be siloed into a function, effectively a side show. If you want to achieve market-creation you need to make it a priority.
4. Remember, technology itself doesn’t create markets.
What creates new markets is the use of technology and whether it provides a leap in value to the buyer. Ask yourself: Is it linked to value innovation or not?
Red ocean and blue ocean strategies are not a binary choice. You need both. But while you’re already focusing on market-competing strategies, ask yourself how much of your focus is going to market-creating moves that generate the resilient growth.
For more insight, you can also read their Harvard Business Review article “How to Achieve Resilient Growth Throughout the Business Cycle“.
I had delivered a session on a similar topic for the SAP User group for Indian customers which was around how to show resilience and overcome the challenges posed by the current pandemic. You can watch a recording of the session here.
A few things that I speak about in the session are relevant whether or not a business is facing a pandemic. I speak about the importance of cash flow. How every CEO needs to be constantly looking at their cash flow (both inflow and outflow) at all times, more critically and with a magnifying lens when facing challenging times.
Resilience comes from the ability to conserve existing cash, creative ways of generating cash inflows, having a tight leash on where the cash outflow happens (1st preference for the activities that generate more cash flow, in times of pandemic, otherwise having a balance between increasing current cash inflows and investing for future cash inflows).
Most leaders fail to strike a balance between investing for current cash flows vs investing for future cash inflows. I call this the innovation gap, which leads to most organisation’s slow death by a 1000 cuts.