Wednesday, June 1, 2011
Strategic Planning Analogy #395: Strategic Trajectories
Back in the early 1970s, National Lampoon magazine did a parody of detective stories. In the parody, the detective was a genius mathematician.
At one point in the story, a bad person was about to shoot the detective with a gun. The detective told the bad person to put away the gun because trying to shoot him was a waste of time. The mathematical detective’s explanation went something like this:
Before the bullet could travel from the gun to the detective, it would first have to travel half that distance. And before the bullet could travel half the distance, it would have to travel one-fourth the distance. Continuing this logic, you could keep dividing in half the distance the bullet would need to travel an infinite number of times. That creates an infinite number of distances the bullet would need to travel to reach the detective. And, of course, anything having to travel an infinite distance would never reach its destination. Therefore, mathematics proves that the bullet would never reach the detective.
It sounds mighty impressive. Too bad it is not true. Just ask anyone who’s shot a gun. I’ll trust their actual experience over the mathematical theory.
Once a bullet leaves the chamber of a gun, it travels along a trajectory. It is nearly impossible to alter the direction of the trajectory of the bullet after the gun has been shot. It’s too late. The direction is already set in place at the point when the gun is shot. The bullet will continue on that trajectory all the way to the end. It is a foregone conclusion.
If your body is at the endpoint of that trajectory, like that detective, you may wish this were not so. You may want to believe that there are mysterious forces holding back the inevitable—perhaps for an infinite amount of time. But this is a false hope. The bullet will follow the trajectory and kill the intended target.
Bullets aren’t the only thing which follows a trajectory. Businesses also tend to follow a trajectory. Based on the way a business is introduced and managed, a path is determined. Sometimes the trajectory is upwards towards great success. Other times, the trajectory for the business is headed towards rapid tragedy and destruction.
In the latter case, the operators of the business may want to deny the inevitability of the rapid destruction. They may work up all sorts of mathematical spreadsheets and analyses to show how the “inevitable” can be stopped. They will use this math to show how the trajectory can be redirected to a better conclusion.
At first, all of that mathematical logic may seem plausible, just like in the National Lampoon story. But, in most cases, the forces behind the original business trajectory are too powerful and too fast. You cannot respond quickly enough or strongly enough to change the trajectory. Despite all that effort to avoid failure, failure occurs anyway.
The principle here is that strategic plans designed to significantly alter the trajectory of a business already in motion have a high rate of failure. The original forces are just too strong and the time is too short to create a successful change.
For example, if a product is introduced with a lousy positioning, the product is quickly labeled by the market as having a “loser” position. Once that label is stuck on a product, it is extremely difficult to reposition it as a “winner.” Just think of the many products introduced to compete against Apple. Apple’s position is to be the “cool” product desired by “cool” people. Almost by definition, this positions the imitating competition as “uncool” and the owners of the competition as “uncool.” No customer wants to think of themselves as uncool, so they buy the Apple product.
Even if you can find a small morsel of mathematics to “prove” how your product excels in some way over the Apple version, it is too late. The “uncool” trajectory has already been set. And that trajectory is pointed towards failure. Microsoft has tried numerous times to reposition the Zune to win against the iPod, but the original trajectory was too strong, so Zune cannot avoid the inevitable failure.
Even if you can find a viable way to reposition for success, there is usually not enough time to fully implement it. Getting consumers to abandon an old, bad impression of a product and accept a new, superior impression takes a lot of time and money. Either the time or the money runs out before the process can be completed. And so much money needs to be spent to alter the trajectory that, even if the trajectory can be altered, rarely will the return ever justify all the cost it took to alter the trajectory. Based on return on investment, a quick death is usually the least bad alternative in these circumstances.
Yet, in spite of all the evidence against trying to alter a bad trajectory, it is a very common strategic approach. Years are wasted trying to stop the inevitable. Better financial targets may be set each year for the annual reposition (supported by mathematics), but the improvements fail to occur—year after year after year.
If trying to alter the trajectory has such a high failure rate, then what are the alternatives?
1) Set a Better Initial Trajectory By Aiming Better
Many business ventures fail because they were never designed to win in the first place. Either the business model is flawed or the position desired is unattainable (often because someone else has already locked up the position). If a winning trajectory is not part of the original design, then don’t be surprised when the launch takes a lesser path.
If you have a business on a losing trajectory, ask yourself this question: if my product disappeared, would anyone really care? Could customers easily adapt and move on without me? Usually, the answer will be yes, because losing trajectories accompany products which have not been positioned to be indispensible. I spoke more about this concept in an earlier blog.
A winning trajectory comes from initial strategies specifically designed from the start to win—to make your product uniquely indispensible. If you cannot adequately answer the eight questions asked in this other prior blog, then you are probably setting yourself on a trajectory to fail.
The extra effort spent up-front to engineer success at the beginning will put you on a better trajectory and save yourself a lot of grief later.
2) Shoot Another Bullet
Once it has been determined that your business is on a bad trajectory, often the best course is to stop the attempt to alter the old trajectory through incremental change and instead turn to a radically new approach.
For example, if you shoot a bullet at a target and realize that the bullet is moving way off course, don’t try to convince the bullet to go a different direction. Instead, aim better and shoot a second bullet. The same is true in business.
Apple’s original trajectory with its personal computer business was going in a bad direction. Its market share against the Microsoft-based PC business was small and getting smaller. Although mathematics might show some areas of superiority, the Apple computer business was on a losing trajectory. Apple could have wasted a lot of time and money to change that trajectory, but it did not. Instead it used its computer knowledge to shoot another bullet—the iPod. The iPod, iPhone and iPad are essentially computing devices. But they were built on entirely different business models and business positions. It was a model where Apple could win. It made Apple such a winner that it provided the time, money and image boost to allow the computer business to recover.
Although the temptation is strong to try to alter the path of a poorly performing product by incrementally tinkering with the strategy, this is usually a futile exercise. The downward trajectory is already set. A better bet is to either spend more time up-front getting the initial trajectory right, or to cut your losses and re-start with a radically new approach.
It used to be a tradition in Detroit that citizens would celebrate the coming of New Year’s Day by shooting guns straight up into the air at midnight. Unfortunately, gravity causes all those bullets that went up to eventually come down. Sometimes, the bullets would cause damage, injury or death as they came down. The city had to spend money to convince people that it was not safe to shoot up because you couldn’t control where the bullets came down.
The same is true in business. Even if you have a business with a wonderful upward trajectory, eventually its lifecycle will end and the trajectory will start to come down. It is a futile effort to try to totally prevent the end of the lifecycle. It is better to look for the next big thing that will grow to replace that which is dying.