Companies find themselves in increasingly turbulent environments; in other words, they are not only changing at lightning speed, but they are also doing so in unpredictable ways. Companies, like species, have three options: they can adapt, emigrate or disappear.
Choosing an adaptation strategy
Adaptation depends on the capacity to address the new environment and the market with a strategy, a structure and an organisational culture that are well-aligned. In the marketplace, we can see companies competing in a variety of ways, but the ones that can build a coherent market-strategy-structure-culture are the most successful.
There are four main options of adaptation strategies (some companies may choose to use a combination):
- The “prospector” strategy enables companies to enter emerging markets as first movers, using innovation to create new products and services.
- Later on, other companies enter the scene with the “analyzer” strategy. They act as followers and opportunists, offering more features at lower prices.
- In markets that are more mature, companies appear with the “differentiated defender” strategy, offering quality and excellent service.
- In mature markets, we can also see the advent of the “low-cost defenders”, who, thanks to their excellence in operations and in cost control, manage to compete in price.
Executing your strategy
The drawing up of the strategy culminates in a series of decisions that are written down on paper – and this takes us to the most difficult part, the execution. This will put the company’s leaders to the test, as they will be required to change in the organisation’s structure and culture.
Restructuring may entail changes in number of employees, functional areas, the nature of jobs, technology, systems and processes. But the true challenge is making the culture evolve so that it is better aligned with the defined strategy.
- “Prospector” strategies are better implemented by what are known as adhoc cultures, which are more flexible and innovative.
- “Analyzer” strategies require a mix of market culture, which is more competitive and results-oriented, and a hierarchy culture, which excels in processes.
- “Differentiated defender” strategies are especially suited to what are known as clan cultures. These are cultures that place an emphasis on cohesion and the capabilities of human talent.
- “Low-cost defender” strategies are most effective in a hierarchy culture, because they allow the company to achieve lower costs.
Can you adapt?
The challenge that organisations face in adapting to change implies a personal development challenge for managers, who constantly must learn and evolve as leaders. Consequently, continuous training throughout one’s professional career has now become essential.
Originally published in EADA View: Aymerich, Ramon. “In the words of…Jordi Assens Serra” EADA View, Sept. 2016: 15.
ABOUT THE AUTHOR
Jordi Assens has worked as a trainer and consultant for companies such as Grupo Agbar, AMES, CRG, Grifols, Grupo Ferrer, Honda, Mango, Roche Diagnostics, Sharp and TMB. Jordi is the Director of the General Management and the People Management Programmes and a Professor in the EADA Strategy, Leadership and People Department. He is a visiting professor at EDHEC (France), NIMBAS (Berlin) and CENTRUM (Peru). His areas of interest are related to the human aspects of companies, from more strategic aspects such as creating efficacious cultures right up to developing competencies on a personal level.