In 2007, my company’s strategy was simple – sell at high prices.
The world was bursting with money, and we were rushing to make the most of it. We imported luxury home decoration materials from around the world and sold them with a solid gross margin.
Everyone was in a rush to live big and live beautifully. When customers tell you, "Shut up and take my money," it's stupid to say no.
The fairy tale ended in 2008 – the music stopped.
Our warehouse, packed with high-end materials, turned from an asset into a liability. Our suppliers wanted us to pay the invoices, but sales were about as lively as a college student after an all-night party.
Following trends might be a good strategy – until the trends turn around. And they always do.
A flexible strategy seems like a better idea.
Becoming a teetotaler by drinking every day
“Flexible strategy” is like AI. Everyone’s heard of it, but few know what it means.
The most common definitions are:
- “We have a new strategy every day” (a classy euphemism for “we have no strategy whatsoever”).
- “A strategy we refresh once a quarter.”
- “Agile strategy” – a species yet to be discovered.
- A vague phrase like “We need to be firm in our goals and flexible in day-to-day actions.’ Sounds like aiming to be a teetotaler but drinking every day.
Having a new strategy every day is absurd.
Refreshing it every quarter is like redecorating your house every three months. It might be exciting, but it’s way too time-consuming.
Agile principles work when companies build software for clients who don't fully know what they want. Great for product development, not so great for business strategy. You may polish your product day in and day out, but still need a clear direction for your business to grow.
Having a “firm” goal but “staying flexible in everyday actions” usually means we’ve pinned the goal to the wall like a lucky charm — and dove straight back into our favorite daily micromanagement.
Most of the time, a “flexible strategy” looks like 1980s accounting met a garage startup and had a baby raised by a management consultant.
But there are other approaches.
The best flexible strategy… is a rigid strategy
iPhone moves through the years like an icebreaker through Arctic Ice.
It's among the world's priciest smartphones, but it's always in demand.
Apple’s strategy is simple: they create products people want to have – no “buts.”
This strategy doesn’t need to be flexible. It can stay as rigid as a hockey stick.
Amazon is another example. Jeff Bezos said: “I very frequently get the question: 'What's going to change in the next 10 years?'… I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two -- because you can build a business strategy around the things that are stable in time.”
Identifying rare, specific needs can be the foundation of a niche strategy. But you can still build a strategy around a common, well-known need – if you find a better way to meet it. And such a strategy doesn’t need to be flexible.
Uniqueness in business is essential. But sometimes, operational excellence beats uniqueness. So, we should aim to be both unique and excellent.
What real strategic flexibility looks like
These days, flexibility is a quality many strategies should have. But that doesn’t mean you just take a traditional strategy and try to bend it into shape.
Here’s what you can do:
Set your strategic goal not as a fixed point in the future but as a direction and pace of development. For instance: “To become the leading company in our market by developing unique solutions for B2B clients that help them reduce costs through our smart budgeting tools — and grow by at least 20% annually as a result.”
Don’t worry if the goal doesn’t look like a SMART objective. Goals set as directions leave you more breathing room – but still keep you on track.
Divide your strategic projects into one-way door and two-way door initiatives.
For one-way door projects, use:
• Waterfall project management method
• KPIs
• Agreed-upon approaches to problem-solving
• Rigid budgeting
For two-way door projects, use:
• Agile
• OKRs
• Problem-solving methods chosen by the teams themselves
• Flexible budgeting
Don’t manage two-way door projects based solely on metrics. Get involved in the process and assess how it’s unfolding.
Pay less attention to deviations in these kinds of projects — and in your strategy overall. After all, you’re learning and adapting as you go.
