Is Your Guiding Strategy Leading you to What Not to do?
This week, one of the world's largest Supermarket companies, Kaufland (from Germany) announced their withdrawal from the Australian market BEFORE they even commenced trading.
Clearly a sad day for hundreds of staff who had left employment and signed on to an aggressive and exciting growth and disruption agenda.
Kaufland's exit highlighted a key fundamental question EVERY Strategy should address – what we should NOT do!
Too often we look to our Strategy to direct us as to the things we should do or keep on doing. It is very seductive to be on a growth path, picking up market-share, introducing new products, entering new and exciting market segments. However, a “NO GO” decision, or even a “RETREAT” call, are equally as important. Kaufland seem to have made a courageous decision. Even though they've tipped in circa $500m, and racked up a loss of $4m for the last financial year, perhaps it was a cheap outcome for what they may be foreseeing?
Here are a few basic considerations to help with your Go / No-Go decision:
How aligned are you and your team on industry and other trends?
What are the critical questions you must answer before you make a major strategic move?
What are the organisational gaps that must be filled to enter into a new market?
How well funded are you/could you be to execute into a new market, product etc?
And, the following three points are adapted from Jim Collins’ “Hedgehog Concept (taken from his book “Good to Great”):
What is your business’ Core Purpose i.e reason for being beyond making a dollar?
What is your business’ most critical method for generating cash and profit, and how will you leverage this?
What is your business TRULY great at when compared with your competition?
Whilst there are organisations that have made erroneous (in hind-sight) “NO GO” decisions e.g Blockbuster to NOT acquire Netflix in their early days, or Kodak to NOT enter the digital photography era, we are merely suggesting that you carefully assess opportunities to extend your organisation, and where should you “PAUSE” or “ABANDON” those opportunities.
If you're leading an established and growing organisation, when was the last time you used your strategic planning process to make a "No Go" decision?
Grow your business without the pain! At Visage Growth Partners, we Demystify Growth.