CEO Coaching: A shocking look at strategy
Of all the questions a CEO must answer, “What’s our strategy?” is one of the most daunting
Significant changes to company strategy (e.g., “Where do we play, and how do we win?”) are frequent in startups but less so in established companies. Why would you radically change a working formula? You shouldn’t! That’s why most CEOs are adept at executing and less so at crafting strategy — they don’t do it more than once or twice (if at all!) in their career.
So, I’m always looking out for good examples of what a significant change in strategy looks like. Often, significant pain drives a significant change in strategy. If you ran the Kodak of old and your business went to hell, you’d look for something to sell besides film, right?
The recent COVID-19 pandemic has forced “creativity” into many companies, because they had a metaphorical gun to their head. Although many small distillers may have turned to making hand sanitizer, and GM used their manufacturing expertise to produce ventilators, those aren’t terribly instructive scenarios for most CEOs.
A better example was a recent story in the Wall Street Journal about the Taser manufacturer, Axon Enterprise. The company had already penetrated 95% of the law enforcement agencies in the United States (a shockingly high percentage!) so needed to expand their addressable market. They were driven by a need for future success, not because they had a gun (or Taser!) to their head.
Here is Axon’s CEO in a proxy statement (a worthwhile read, by the way), April 15, 2020:
“In 2008, as the financial crisis gripped the world, we decided to transform our entire business from being a simple TASER devices manufacturing firm into an integrated technology company making wearables and cloud software. The transition was anything but easy — we had many difficult learning curves to overcome. As competitors in the public safety space retreated, we advanced into new opportunities and established ourselves as the clear market leader in cloud-hosted digital evidence management and camera sensors.”
This market-driven strategy versus the previous product strategy may sound simple, but the internal changes required are significant, and their financial results indicate they have executed well.
Let me know if you have a good example to share. We often learn best by stories.