Intelligence will hamper your progress

Oh, how I have learnt to love that line, and quote it so often to interns who search for the holy grail of strategy.

The iPod and Honda

There are two notable instances where intelligence has been relegated to the sidelines; where a strategy was either just decided upon (strategy as design) or came about through happenstance (emergent strategy). The former strategy birthed the iPod; the latter strategy introduced America to Honda. [Ref: 1, 2]

In 1999 the amazing Sony NW-MS7 MP3 player was launched onto the market to liberate us once again to be able to listen to music anywhere, just as the Sony Walkman had changed our lives in 1979 with cassette tapes (if you don't know what a cassette is, ask a wrinkly near you). By 2001, there were over 50 brands of MP3 players - hardly the market to look to for saving Apple from its previous year's $344m loss. In addition, Apple had a shaky track record of introducing new products - anyone recall the Newton? The Quick take? The Pippin? Well, Apple would not like to remember them either.

Steve to the rescue

Along comes Steve Jobs and makes very clear his attitude about market intelligence with Henry Ford's quote "If I asked my customers what they wanted, they would have just said a faster horse." He went into the MP3 player business, because of three reasons. Firstly, it was growing, secondly we all listen to music, and thirdly no one had got it right. With iTunes he had a complete ecosystem for music (which none of the others had, even though Sony owned Sony Music) - so not only was music portable, but it satisfied the contemporary criteria of "I want it now".

Vroom for improvement

When Japan invaded America with motorcycles in the 1960s, the Boston Consulting Group described their success as follows:

"Their market strategies are directed towards developing high volume, hence the careful attention that we have observed them giving to growth and market share."

The Japanese executives who launched the motorcycles explained it a little differently:

"In truth we had no strategy other than the idea of seeing if we could sell something in the United States. Mr Honda was especially confident of the 250cc and 305cc machines. The shape of the handlebar of these larger machines looked like an eyebrow of Buddha, which he felt was a strong selling point."

What actually happened was that they used the 50cc machines to get around town - people liked what they saw and it started selling - mainly in sporting goods stores.

So there you have it: strategy by design, or a strategy that emerges - both devoid of copious amounts of market "intelligence". Like a surprisingly fresh kick to the groin.

For a fresh perspective on strategy, attend Sid Peimer's upcoming course Strategy Unplugged in Joburg on 14 May.

Sid Peimer provides freelance strategy, training and consulting. Details on the website www.stratplanning.com

References

Ref 1: John Ashcroft. Apple from the iPod to the iPad - A case study in Corporate Strategy. Second Edition 2012.
2. Gerry Johnson, Richard Whittington, Kevan Scholes. Exploring Strategy. Ninth Edition, 2011.