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Nov 21, 2023
By definition, an incumbent organization was built to succeed in the past. It was designed to do (or learned to do) things that allowed it to outperform competitors, and it did them well.
By extension, any successful incumbent will—at some point—need to redesign or unlearn certain things to remain competitive in the future. So far, so obvious. The challenge, as Scott Cook of Intuit memorably put it, is this: “Success is a powerful thing. It tends to make companies stupid, and they become less and less innovative.” And this is doubly damning because the stupid thing a successful incumbent does might very well feel smart in the moment (and based on ample past experience).
So how can the successful incumbent step outside of itself and get a radically different perspective on present and future strategy? One of our favorite approaches in working with clients on this challenge is to help them envision a killer competitor.
When Pascal & I facilitate this process through a workshop, we typically start by asking leaders of the incumbent org to scan the macro environment for signals of change and likely shifts in the next 5-7 years. We do some trend & signal work together and explore cascading implications to develop a sense of what is likely to change and where we might anticipate emerging opportunities and new risks to the established ways of doing business. We also devote a little time to considering what WON’T change over the same timeline – be it a job-to-be-done, a durable customer need, a relative demographic or environmental certainty, etc.
With that work complete, we’ve identified a set of key drivers of change, and we’ve mapped out some emerging opportunities and risks. Now we can more fruitfully ask: What sort of organization would be uniquely suited to thrive in the future we’ve described so far?
To get a little more granular, we break that overarching question down into specific fields…
When we turn to envisioning the “killer competitor,” we always work with the stipulation that this organization needn’t be nor even look like any firm currently in your market or on your radar – the Burger King to your McDonald’s, so to speak.
The low-level takeaway that emerges, almost invariably, is that the killer competitor in your industry, designed for the future from the ground up and without constraint… does not look much like your organization. The higher-level takeaways come through exploring the delta between your incumbent org as it exists today and the imagined firm ideally suited to thrive in the future – and then asking what actions you could take in the very near term to be better adapted to that future and/or more robust to that type of competition.
The last point is a nuanced one, and it’s important to unpack. The value of envisioning the killer competitor isn’t always about learning how to become that competitor. In some cases, the picture of the killer competitor that emerges is one of a firm that your incumbent just can’t (or perhaps even shouldn’t) become. Pascal recently did a version of this workshop with a global FMCG company that identified a vulnerability in some markets to a killer competitor that might pursue a scrappy marketing strategy that the incumbent just couldn’t countenance for legitimate ethical and brand concerns. But in exploring the killer competitor’s potential strategic play, the incumbent execs were able to consider their own defensive moves – and to ask what they might do today to make their company more robust to that sort of upstart competitor (pushing for tighter industry standards, etc.).
Stepping outside of your own organizational frame can provide a radically different—and highly valuable—perspective on what your firm might need to become and also real clarity on what it should be watching out for as the future unfolds. So, what does your company’s killer competitor look like? (via Jeffrey)