Strategy in the Age of Disruption

How to think strategically

Take an outside‐in view

Look outside for strategic positioning to identify threats and opportunities. At the highest level, strategy is concerned with the external market and how the organization's resources should be allocated to create an exploitable advantage.

There are always emerging trends in the form of drivers, disruptive forces, and threats: new entrants, competitive forces, regulation, globalization, economic, workforce, market, consumer and demographic changes, suppliers who might cut you off, substitute products that could undermine your business, and macroeconomic trends that may reduce your customers’ ability to pay.

The business may be threatened by a competitor that can produce the same quality goods at a much lower price or a much better product at the same price.

A strategy must be able to cope with these threats. The outer environment also harbors opportunities: new technologies, emerging competitors, an unserved customer base, and so forth.

Thus, the first job of strategists is to scan the outer environment for threats and opportunities. Here's a proven approach: Form a team of executives, a department manager, and individuals with special insights.

The team's job is to identify the core threats and opportunities. Avoid having anyone on the team who appears complacent or wedded to the status quo.

Gather the views of customers, ...