The Problem with Strategic Initiatives

Google seems to give up on their big social initiative: Google+ was not going anywhere and did not seem to make any impact on Facebook. Apple is paying people left and right to make Apple Music a real thing. Fake it till you make it (maybe the new redesign will make the service more useful). 

Google+ or Apple Music are 2 of the recent examples of strategic initiatives. They could turn into huge successes but so far the reviews have been less than stellar. 

Main problem is strategic initiatives are trying to solve (perceived) company problems. And that’s the problem right here. Company problems (usually fueled by paranoia) are NOT customer problems. This lack of alignment is the fundamental strategic error that leads to all sort of tactical blunders. The root cause is the fear of missing out. It is caused or accentuated by managers leading by looking in the rear mirror and getting freaked out by competitors moves or new tech trends. 

Forcing your Way into a Market

Let’s look at 2 stories about Microsoft. One is about  their mobile App Store. Started out of late plans to create a competing mobile store to Apple’s AppStore and Google’s Play Store, it never took off. But their strategy was to pay developers to develop for the Windows Mobile OS. It didn’t work for Microsoft as it didn’t work for Amazon trying to create an alternative Android store. Because the users were not there. Solving the chicken & egg problem requires a dedicated article but let’s just say faking it when there are huge competitors doing it for real is not the right way. 

The Xbox One started similarly. It was a built for an imaginary customer base (people looking at the console as the media library rather than a gaming machine), resembling the visions of some executives. But after countless reorgs and execs shuffling they aligned the product with their real userbase. Some could say it was a bit late but since then Xbox recovered some of its mojo. 

Too little Too late

When a problem gets noticed by the higher ranks and the company aligns itself to a strategic initiative it’s usually to late. The backward looking strategy usually misses the whole point and acts more like (horse) blinkers. This does not apply to all companies and to all projects but most strategic initiatives are reactions to past events, not forward looking. 

Take Internet Explorer for example. Microsoft was so afraid of Netscape that it made the browser a strategic initiative. They  advanced IE and they bundled it with the OS, thus obliterating their nemesis. Only to discover that they completely missed Google. Turns out the application layer sitting on top of the browser was more lucrative. 

Google did the same thing with Android. Born from an unconcealed Apple envy, Android was Google’s push to make sure they will not be cut from mobile.  I assume the rivalry was big enough that nobody challenged the assumption that one has to own the OS in order to get the customer attention. Now Facebook & its other services is what billions of people interact with on their devices. 

Culture meets Initiative

When you combine a lack of client understanding with a myopic worldview shaped by the existing business model then any planning is pretty much useless.  Apple can never get better at services as long as they see iCloud as monthly tax for iPhone users and nothing more.  It’s not natural for Apple to think different(ly). The same way it’s natural for Google to envision a social network based on all sorts of fancy algorithms. Leaving aside the lack of incentives that makes a company susceptible to disruption, the culture of a company is usually the first line of defense against critical thinking. When you have a hammer everything looks like a nail.  The hammer in this case is made by a set of core beliefs and core competencies that were reinforced for many years. Any solution to an imaginary threat will be analyzed through the corporate cultural lenses. And it’s exactly this where everything goes south. 

At the core most of these big initiatives fail because of the lack of alignment with the customer's real needs. The company culture, the executive’s paranoid fear of missing out, the myopic view of the playing field all follow from that fundamental problem. So next time your company announces a massive strategic initiative ask yourself what’s in it for the customer. Because if there's nothing there, it will likely fail.