Thursday, October 20, 2011

Strategic Planning Analogy #418: It’s the Same Distance

Back when I lived in urban Minneapolis, I had a commute to work by car of about 14 miles. Although it wasn’t the greatest time of my day (I was in traffic tie-ups every day), I didn’t think a whole lot about it. It was just something I had to do every day.

By contrast, when I was living in Green Bay (a much smaller market), I was considering a job in Appleton. Appleton was one county away. The commute from my house to that new job would have been about the same distance as my commute in Minneapolis (around 15 miles). In fact, because of the nature of the traffic, the time of my commute from Green Bay to Appleton would have been shorter than the commute I had in Minneapolis. Yet, my desire (if I got that job) was to relocate from Green Bay to Appleton in order to shorten the commute.

Why did 14 miles of commuting seem okay in Minneapolis, but not between Green Bay and Appleton? I think it has to do with what I saw outside my car window during the commute. In Minneapolis, the entire drive was through a dense, urban environment. The view really didn’t change during that commute. All I saw was a built-up urban view. It was as if I didn’t go anywhere, because the view didn’t change.

By contrast, to get from Green Bay to Appleton, I would have left the urban view of Green Bay and driven into rural farm country (complete with barns and grazing dairy cows). Then I would have left the rural area to enter the urban area of Appleton. This contrast in views made me feel as if I was going on a very long distance because I was leaving one environment to go through two more visual environments. That made to commute seem so much longer and more dramatic.

Visually, the Minneapolis commute felt like I was staying in the same place. By contrast, the Green Bay to Appleton commute felt like I was leaving one world to go to another. As a result, I was willing to accept the commute in Minneapolis but not the commute in Green Bay, even though the distances were about equal and the travel time in Minneapolis was actually longer.

One of the main purposes of strategic planning is to help get a company from where it is today to a better tomorrow. That journey into the future is a lot like my commute to work.

If the view on that strategic journey stays the same (like my Minneapolis commute), then people are content to stay on that journey. They are content, because it doesn’t feel like much of an effort—everything seems the same.

However, if that strategic journey includes a dramatic change in view (like commuting from Green Bay to Appleton), then it feels like the journey is much longer and much more difficult. There is more resistance to taking the trip.

Yet the reality is that the future comes at the same pace, whether the view changes or not. The working time is the same, regardless of what work is being done. Even though a change in work may make the work seem harder and more time consuming, the reality is that it is merely another way to occupy the same length of time. And, as we shall soon see, it may actually be easier work.

Therefore, if your strategic vision requires significant change for your organization or its position, expect increased resistance due the perception that a change of view makes for a more lengthy and difficult trip. But remind people that this perception is not necessarily reality. Just because the view outside the window changes does not mean that the effort in driving the car is all that different. All you’ve done is just point that effort into a new direction—a better direction.

The principle here is that change is often not much more difficult than maintaining the status quo. It only seems that way because it is different. As strategic leaders, we need to help people see that beyond the false perception to the reality of the situation.

Here are three points to consider when persuading people to accept the journey of change.

1) Trying to Maintain Status Quo When It is Out of Sync is Very Difficult
Moving forward doing the status quo sounds easy. After all, it’s what we know and it is what gave us success in the past. But if the environment changes, then the status quo may not be as easy as it used to be. The effort to make the status quo still relevant in a changing environment can become a lot harder than expected.

Consider, for example, a conventional supermarket which suddenly has a big Wal-Mart supercenter built across the street. All of that status quo work which made the conventional supermarket successful in the past now has less of an impact. Doing the same old thing leads to lower sales and lower profits, because the Wal-Mart supercenter has taken away a large chunk of their business. The conventional supermarket has to work a lot harder just to try to lose only a little bit of past glory.

The supercenter has a natural superiority in price and selection. It takes a mammoth effort to try to overcome the resulting natural inferiority at the conventional supermarket. Unless the conventional supermarket changes its strategic approach, it can triple its effort on the status quo and still come up short. So sticking with the status quo may not be as easy as it first appears.

Change in the environment is inevitable. Eventually, the actions of the past will become out of sync with the marketplace. Their effectiveness will go down. Therefore, you will have to double or triple the effort in order to get the same impact as in the past. That doesn’t sound easier to me.

2) Getting in Sync With the Future May be Easier
I was hesitant to take the commute from Green Bay to Appleton because the scenery changed. What I didn’t take into account was the fact that because the commute would take me out of the city, I would be heading away from heavy traffic. The commute is easier in the country, because fewer cars are there. This would have been a much easier commute than the congested one I had in urban Minneapolis.

The same is true in strategy. If you change your strategy and head for a brand new position, you can end up moving in a direction which is far less competitive. There are far fewer cars on the road (competing entities) trying to reach that spot. As a result, this move into new territory is actually easier.

This is the principle behind the Blue Ocean strategy. By moving to uncontested new locations, success is actually easier to obtain.

In the example above, instead of working harder at the status quo, the conventional supermarket could have repositioned itself as the premier store for healthy, fresh, organic and wellness products. Using Whole Foods as an example, this type of concept can peacefully coexist against a Wal-Mart Supercenter and even provide the opportunity to successfully raise prices and margins.

Yes, that would require a change is activity. But it might provide a greater return for the effort than trying to make the status quo still work. And it would probably be even less effort in the long run to make that change than to continue the fight with the ever less effective conventional tools.

3) Changing Early Has its Advantages
There are many advantages to being an early mover when the environment changes. You get to own a position before it is contested (the easiest way to get a position). And it is easier to keep a position already owned than to take a position away from someone who already has it.

First movers get to define the category (and define it in a way most advantageous to themselves). First movers can lock up the supply chain to their advantage. First movers get customers in the habit of choosing them (and habits are hard to break).

All companies get the same amount of time. We all get only 24 hours in a day. If you spend most of your time driving in the status quo, you will be in the wrong location when your time is up. It is the one who redirects the car towards the new view early who gets there first (and gets the advantages of being first).

Trust me, if you wait until the end to realize that you drove in the wrong direction (towards status quo) and then try to catch up to those who took an early route to the future, you have a very difficult task in front of you. You will get to the future late and at a competitive disadvantage. That sounds like an awfully lot more work than just steering your company towards the future early on.

People tend to resist change because at first it appears to be harder and more time consuming. However, the reality is that early adoption of change can actually be easier and less time consuming than sticking with the status quo. The problem with the status quo is that eventually it will become out of sync with the changing environment. As a result, you have to work ever harder at it while getting ever less benefit. By contrast, early movement into uncontested areas of the future can be easier to attain and easier to defend. As a result, status quo is usually the harder and more time consuming approach.

I knew someone who moved from Chicago to Green Bay. He noticed that most of his co-workers had a home in Green Bay and a cottage further out in the country on a lake. So he did the same. Then he started thinking. He realized that the length of time it took to get from his cottage on the lake to his job in Green Bay was about the same length as the commute he used to have in Chicago. Therefore, he sold his house in Green Bay and lived full time at his cottage on the lake. This made him much happier, because the commute took him to a happier place. If you accept the idea that a changing view is okay, then you can become happier, too.

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