The dangers of strategy myopia
Theodore Levitt was a longtime professor at the Harvard Business School and a heralded editor of the Harvard Business Review. His seminal 1983 book, "The Marketing Imagination," was one of the first business books I ever picked up and remains one of the most captivating. I have recommended it often.
In Chapter 8, “Marketing Myopia,” Levitt begins with an in-your-face statement:
"Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others that are thought of as seasoned growth industries have actually stopped growing. In every case, the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management."
I especially appreciate those last four words: "a failure of management." They resonate not only because I’ve come to learn how true they are over the course of my career, but also because embedded in Levitt’s thought is the principle of agency: If and when our companies fail, it may be explained by circumstances, but it won’t be due to them. It will be due to those of us in leadership positions who have agency in affecting the outcome.
Broadly speaking, myopia is the problem of viewing something too narrowly and without proper context. The marketing myopia to which Levitt referred was how easy it is for companies to focus on producing goods and services rather than creating and keeping customers. It’s a temptation into which any company can fall, particularly when things are going its way in the marketplace.
I’d like to suggest a related kind of myopia that tends to rear its head when things are not going so well: strategy myopia.
Strategy is such a commonly used term that it can come to mean anything (and therefore nothing). In this context, let me define strategy as "the unique and specific pathway an organization chooses by which to accomplish its objectives, as opposed to all the other pathways available to it."
Choice is a definitional component of strategy, for without choice there can be no strategy, and we’re all just victims of circumstances.
The flaw of win/lose thinking
In a competitive marketplace, we sometimes view choice myopically in the form of a win/lose paradigm: “If they win, we lose.” That can lead to a lot of bad decision-making.
The win/lose paradigm is indeed reflective of certain strategic situations (war, politics, sports) because the conditions in which those contests take place are bounded by limits: limited geography in the case of war, limited elective offices in the case of politics, limited time or distance or at-bats in the case of sports.
In business, however, any limits that currently exist are temporary. And each player has the ability to break through them.
Nintendo once owned the video game market with its various offerings (Super Nintendo, Game Boy, et al) until Sony came along and ate its lunch with PlayStation. Rather than accepting defeat, Nintendo came roaring back with the Wii. The digital videogame market is one of continuous innovation; if it wasn’t, we’d all still be playing Pong.
If you make, say, wallpaper, and one of your competitors corners the market on raw materials, you’ve got a big problem. But you can choose not to be defeated: You have technical know-how, manufacturing capacity, a distribution network, R&D capabilities, access to capital, customer knowledge and, most importantly, imagination. Not to mention newfound motivation.
All industries go through a predictable cycle of innovation, acceleration, maturation, saturation and commoditization. The art of strategy is recognizing when the cycle is turning; when you see signs of saturation -- win/lose thinking among them -- your objective must be to leapfrog over commoditization into a new phase of innovation. Today’s market share leader is tomorrow’s anachronism; as the wise professor says, “If a company’s own research does not make its products obsolete, another’s will.”
Remember the “good old days” when we thought we could make a one-time investment in building a website that would last for years? We’ve since come to understand that a company’s digital presence is a living, breathing, organic thing that must be given continuous care and tending.
It’s never “done.” What’s true of your digital footprint is true of your overall business model -- if you think it’s done, you’ll be done for.
Placing too much focus on the existing competitive context is a form of strategy myopia which, while unavoidable in the short term, is irrelevant in the long run. We must not confuse how to win in commerce with how to win in conflict or we’re likely to make decisions that overlook and even inhibit innovation opportunities.
Believing the only way to win is by crushing your current opponent is likely to lead to a kind of brutal commoditization that causes everyone to lose (see: Politics, American).
There’s only one Mesopotamia, only one available seat in your congressional district, and only one World Series champion, but in business there can be unlimited winners. That’s the beauty of the continually evolving marketplace. To prevent strategy myopia, we must keep one eye on what’s in front of us and another on the horizon. There’s always a new day on the other side.
Each month, When Growth Stalls examines why businesses and brands struggle and how they can overcome their obstacles and resume growth. Steve McKee is the co-founder of McKee Wallwork + Co., a marketing advisory firm that specializes in turning around stalled, stuck and stale companies. The company was recognized by Advertising Age as 2015 and 2018 as Southwest Small Agency of the Year. McKee is also the author of “When Growth Stalls” and “Power Branding.”