Options are superior to Strategy. Most often companies create strategic plans based on fixed mindsets that are built on past patterns of business, which is why these plans rarely have any teeth. Other times, companies include their values, vision and mission in their plan and use their strategic plan as a pseudo employee attitude and behavior change tool, which at least gives it some potency in relation to day to day activities.
The most potent quadrant in a SWOT analysis is the Opportunities quadrant, however, I prefer to use the word OPTIONS, so clients are looking at Strengths, Weaknesses, Options and Threats.
When employees are allowed or even better, paid to tinker and incur small financial losses in the process, they inevitably stumble on something rather significant!
– Coke started as Pharmaceutical.
– Noikia as a Paper Mill and Rubber Shoe Maker.
– Dupont went from Explosives to Teflon Frypans.
– 3M was a failed Quarry Mining Business.
– Avon as door to door Book Sales.
– Apple made circuit boards for Home Computer Builders.
In term of strategy, your next steps could be:
- Rank everything you do by optionality – i.e. how well does this activity lead to new things.
- Look for open ended, not closed ended payoffs. Apple could have built supercomputers, but they choose phones and now… iWatches!
- Do not invest in business plans. Invest in great people who create even greater open-ended options.
- Look closely at the Weaknesses and Threats in your SWOT analysis to minimize your downside risks. In other words, provide for the worst scenario and let the best scenario take care of itself, rather than provide for the best scenario and hope that the worst will take care of itself! The later is a time honored and statistically certain recipe for failure.
What are some of the questions that arise when thinking about options?