There is a traditional analytical approach to developing a business strategy: analyse the market and all the factors at play, do a SWOT analysis or look at Porter’s five forces and, based on this research, select strategic products and target markets. You can, for example, hire McKinsey to conduct such research and present the strategy in a long document with numerous tables and graphs.
In recent years, the approach to strategising has been changing significantly. It now takes into account the increasing uncertainty of the world and the tremendous speed of technological development. The new approach is based on two key elements: analysing customers’ grievances and experimentation. Instead of extensive analytical work, the suggestion is to go to actual or potential customers and ask them what ails them. Then, based on their needs, quickly create a prototype of a new product to offer to the customers. Often, they will turn their noses up at it, but without clinging to your initial idea, you need to rebuild or reinvent your product and then test it again. This is flexible strategising based on constant contact with the customer and experimentation. It also prompts to approach larger tasks, such as developing new markets and opening new businesses, in a similar way.
There has always been a third, visionary approach: to “see” the future without McKinsey, without deep analytics, without experimentation, and to create a visionary product, unheard of and not based on any clients’ existing ailments. It means not to follow the market but to shape it, which, of course, is rarely successful and most often fails. We all know successful visionaries, such as Steve Jobs or Elon Musk.
Let us now take a look at these approaches with the SHIVA reality in mind.
Analytical strategising works very poorly today. It suggests that the market is quite stable, and its development can be predicted in the long term. With the advent of Shiva and the acceleration of technology development, this approach can only be used by businesses with a very long investment cycle (when, for example, you need to model the return on a new factory) – for most companies, it no longer works.
Experimentation, based on studying customers’ ailments and constantly collecting and analysing feedback is an approach certainly better suited to the new era: the time horizon is shrinking, and we are taking small steps to find what the customer needs here and now.
The visionary approach always works, but there are few real visionaries. And of those who are, many are insane or are believed to be insane because they happen to be wrong in their vision.
All three approaches do not take into account the most important feature of the SHIVA world: in times of change, familiar reference points disappear, and matters of value become more acute.
Shiva reveals and brings to the surface core personal traits and values that would otherwise remain hidden. This applies directly to business leaders. Therefore, I argue that in times of SHIVA, business strategy becomes a personal matter. What do I mean by this? The possibility to approach business development rationally (first of all, analytically) is diminishing, and the importance of personal factors and values is soaring. Business strategies become personal – and they correlate with the five responses to Shiva described above. If the owner is an Adventurer by nature, it is likely that in times of SHIVA, his business strategy will be adventurous, a combination of experimentation and the visionary approach. If the owner is a Missionary (the Calling strategy), the company will engage in social business, perhaps sacrificing profits; this approach could be called a “value-based visionary approach.” Many businessmen choose the Preservation strategy for their enterprises: they reduce investments and focus on improving operational efficiency – and this is primarily determined by their psychological traits, which translate into the business strategy. Finally, some people try to run their businesses in the Stability paradigm to the last, ignoring the turbulence and implementing those long-term plans that were developed in quiet times.