Choosing the Right Organizational Strategy

The Nine Types of Strategy is an excellent tool I developed 25 years ago that remains as true today as it was then in describing the different ways organizations can conceive of business strategy.

When tipping points or catalytic moments arise in an industry, or a competitor has gained significant advantage by being first to market, a very deliberate strategy is needed. One such strategy is “market-jumping.” The intention is to exit a market that you perceive to be withering. It aims to place your company in a brand new market. Thompson-Reuters employed this strategy to deliberately move from community-based newspaper publishing into business publishing. There’s also the “first to market” strategy. It aims to own intellectual property, trademarks, or patented materials that will give your company a firm beachhead in a new market. Both strategies are very deliberate and require sufficient resources to make them work.

Many companies use an “opportunistic” strategy: they look for opportunities to expand into new markets, attract new customers or gain business efficiencies. For example, a manufacturing company may look for lower-cost suppliers offshore, or a real estate company may seek a foothold in an emerging senior housing market. Opportunity-based strategies heed the adage “fail early and fail small.” They invest a little money to see if they can make the new opportunity work.

Choosing the right strategy for your company requires good timing and a deft touch.  When pursuing an opportunistic strategy, don’t try to do too much all at once. If you’ve got, for example, great sales capacity but find your existing sales force is underutilized, one strategy is to jump into an adjacent market and sell there. If you’re not a sales and marketing company but a technology company, it makes more sense to jump into another technology space and license what you’ve got to someone who’s good at sales. But trying to be that technology company that jumps into a new market and develops a sales force? That excessive ambition is often a recipe for failure.

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Eric Douglas

Eric Douglas is the senior partner and founder of Leading Resources Inc., a consulting firm that focuses on developing high-performing organizations. For more than 20 years, Eric has successfully helped a wide array of government agencies, nonprofit organizations, and corporations achieve breakthroughs in performance. His new book The Leadership Equation helps leaders achieve strategic clarity, manage change effectively, and build a leadership culture.