The Ostrich Strategy

Sometimes an industry faces a long term threat that appears so overwhelming that the long term strategy appears to involve sticking management’s collective heads’ in the sand, hoping the problem goes away.

Now, it turns out that an ostrich does not stick its head in the sand. An ostrich is smarter than that. An ostrich learns to lay low, head to the ground, blending in with the scenery until it is time to jump up and run. Or jump up, kick and run. Or bite, kick and run. An ostrich keeps its options open.

Many strategic plans appear to do the same thing with long term threats. The threat gets mentioned, maybe a study group is formed, maybe a bit of research is assigned. True believers in the importance of the long term threat might even be given a ’special project’ to concentrate on.

Truth be told, this is just a different form of sticking your head in the sand. The long term threat is separated from the day-to-day operations of the company. The company isn’t ‘laying low’ waiting for the opportunity to run. It has segmented the issue, hoping something will come running to the rescue when needed.

A recent examination of U.S. automakers’ difficulty with battery technology highlights the issue. Back in the 70’s they let more fuel efficient autos in the door when fuel supplies became expensive and unpredictable. Today, once again they are behind in technology that improves fuel efficiency and it appears that competitors may have locked in years of advances in battery technology critical to catching up.

Where was the point in the strategic plan that said, “With a spike in oil prices our entire sales model will be disrupted and we will have to improve fuel efficiency because customers demand it?” You know it had to be there somewhere. They spent millions on research. They’re not idiots.

In the end, the issue was relegated off somewhere. The opportunity costs of being caught flat footed were not factored into their existing line development. The costs of playing catch-up in a world where falling behind can be terminal were ignored.

Your products face long term strategic threats. It may be environmental, it may be technological, it may be social. They exists. There are examples of great companies facing these threats head on. Building the fact of disruptive change into the day-to-day operations of their firms.

So, if you’re going to mimic an ostrich, make sure you know how an ostrich actually deals with threat — because sticking your head in the sand does not work.

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One Response to The Ostrich Strategy

  1. Pingback: Executive Compensation And Unemployment | Mark Cuban’s Proposition – Frog Blog

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