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The purpose of a strategy

The purpose of a strategy is to change the world in a way that the chances of success increase.

Crucially, you need to figure out what needs to be true for you to succeed so that you can take action to make it true.

This is different from what quite a number of startups do who wish something was true. Their vision is built on an ideal world that should exist but doesn’t.

Just as dangerous is the stance that causes quite a number of well established businesses to struggle. These businesses feel “entitled” to a truth. They insist on something being true. It was true in the past and thus, it must still be true. Which it isn’t.

In both cases, the businesses spend most of their time on activities that would work if things were different. Which they aren’t.

More importantly, they fail to identify and take action that could change the world so that the conditions for success are actually altered in their favor.

What needs to be true for your idea to spread?

Existential Threats

In order to understand business moves of larger corporations, it’s a useful exercise to consider how they relate to existential threats to their business model.

Why did Amazon build Prime Video? To protect itself from Netflix and other streaming platforms. It’s not hard to imagine Netflix monetizing product placements by offering viewers the possibility to shop for the things they see in a show. Nowadays, we’re living in the attention economy. If somehow, instead of the web, all of the attention went to Netflix (or some other streaming platform), Amazon would be left without much attention and thus – without the possibility to sell you things.

Why did Google build Chrome? To protect itself from any other browser dominating the web. The web is where Google makes its revenue. Therefore, if anyone (e.g. Firefox or Safari) reached the position of a gatekeeper who can replace Google as the default search engine (or worse: block ads), it would mean an existential threat to Google.

Similarly: why did Google buy and nurture Android? To protect itself from any mobile platform dominating the access to the user. If anyone (e.g. Apple with the iPhone) reached the position of a gatekeeper who can control what apps can be installed on most users’ devices, it could potentially become an existential threat to Google.

What would be an existential threat to your business? What do you need to build in order to protect yourself against it?

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Picture of Dr. Michael Gerharz

Dr. Michael Gerharz