Recently, a Silicon Valley/San Jose Business Journal article reported the results of a BrandZ study that Apple’s brand is #1, now estimated $183 billion, followed by IBM at $115.9 billion and Google at $107.9 billion (May 22, 2012). How did these companies achieve the top 3 brand value placements? Was it their strategy or their entrepreneurship? Did these three companies favor one discipline over the other, or were they able to merge the two? Are these two disciplines mutually exclusive? Strategy and entrepreneurship might seemingly sit at opposing mindsets, and may seem mutually exclusive, but they are most effective when businesses apply them together in a continuous process.
What is strategy?
Strategy is planning for the future. As defined by IBM, “it is what a company does to sustain and grow its business value into the future.” Strategy is accomplished through various analyses, e.g. gap analyses to assess perceived business gaps or weaknesses. Strategy is also accomplished by scenario building — exploring scenarios to articulate critical success factors in the current and possible future business climates. Further, strategy recognizes predictive patterns in the various market, product and competitive contexts. By itself, however, strategy could risk residing in endless analysis, or exist at the big-picture level never achieving real-time relevance. Strategy is still largely associated with a methodical planning process and thoughtful mindset – organizations are expected to pause and reflect in the strategic process. It is little wonder that today’s fast-paced, ever-evolving business tends to relegate strategy to an annual process at best, generating little more than a written plan that becomes stale rather than driving business behavior. Because strategy can become a forced activity, it can seem disconnected from everyday issues. It is when strategy is combined with entrepreneurship, that it translates into a business readiness to act, and becomes relevant, current and executable. Strategic thinking becomes a consistent part of the business management process – an ongoing endeavor that yields breakthrough results and continuous improvement.
What is entrepreneurship?
Entrepreneurship is innovation and movement; a drive towards what is next on the horizon; and an inherent readiness to operate with agility. Being entrepreneurial requires flexibility and openness to new concepts and premises – a willingness to challenge the status quo. By itself, however, entrepreneurship could result in a series of disconnected thoughts and actions lacking overarching purpose. Challenging the status quo must also be strategically driven or risk yielding disruptive consequences. A company singularly focused on entrepreneurial drive may have little perceived time for strategic reflection. Such agile companies may mistakenly bypass strategy altogether, or at best define strategy narrowly as a process to get an idea built and taken to market, but then abandon strategy post-release. What this approach misses is how strategy sustains the stream of breakthrough results and continuous improvement. When strategy is mapped to entrepreneurship, the discipline of analytical assessment and scenario building helps overcome entrepreneurial risks and provides a purposeful context to entrepreneurship.
Strategic Entrepreneurship
A decade ago, Michael A. Hitt, R. Duane Ireland, S. Michael Camp and Donald L. Sexton wrote about “strategic entrepreneurship” so this thought is nothing new. Yet, achieving strategic entrepreneurship remains challenging today in the face of uncertain market forces, globalization, competition, and organizational challenges. Lean startups are born out of an innovative spirit, and many successfully operate as agile, adaptive organizations. As organizations grow and become more established, their organizational layers expand and grow. Larger organizational cultures can become more procedural and planned in the interest of streamlining business operational processes. Keeping the innovative pump going can be challenging. Successful companies like Apple, IBM and Google prove their success at the intersection of strategic and entrepreneurial thought. The balance is not always 50-50, but achievable. These companies have figured out how to promote and sustain innovation as a core strategic value, and have found ways organizationally to share ideas and create.
Apple is synonymous with breakthrough products — the company’s intrinsic strategic value is expressed through well-designed, fun and highly functional products. The target customer is well defined, and the customer’s expectations are also clear. Once the customer engages with an Apple product and the Apple brand, the customer willingly advocates the product and the brand. The customer often brings Apple products into the enterprise, perhaps influencing enterprise adoption of Apple products. Apple has been successful in engaging the customer because of its ability to consistently deliver the brand promise.
IBM, a truly strategic organization, recognizes the need to drive towards value creation and breakthrough strategy. IBM takes the time to promote forward-looking corporate strategy, finds ways to replicate strategic successes internally, and actively participates in scenario building towards the future. The company also builds collaboration through innovative uses of social networking and social learning internally. This has not only enabled idea-sharing but has also arrived upon breakthrough ideas that generate value for the company. IBM’s disciplined forward-looking strategy has helped the organization grow and evolve through the times, and sustain its brand at the top.
Google’s innovation has galvanized a behavioral revolution online, has led to its ascension as an online search standard, and has established Google’s online dominance. “Google it” has found a way into our common language. Google continues to churn out breakthrough products such as Gmail, Google maps, Chrome (which recently surpassed Microsoft Internet Explorer), and the Android OS (the leading Smartphone OS). How does Google fuel its innovation pipeline? Internally, Google consciously fosters creation and collaboration among all ranks of Googlers through small work teams. Googlers are drawn to the company, and continue to thrive there, for the opportunity to create impact. Google actively endorses ideation by allowing its Googlers to allocate as much as 20% of their time to pursue new ideas they are passionate about. Gmail and Google maps, for example, emerged from these “20% projects.”
The confluence of strategy and entrepreneurship
Strategy is a necessary recurring core process in any business determined to succeed by design rather than happenstance. Without regular strategic planning, managing a business can become an endless series of reactive firefighting and crisis management. Such behavior can further contribute to an inability to address changing business climates. Entrepreneurship is a necessary recurring drive to innovation, to challenge current assumptions, and to meet next-generation requirements. When strategic planning is mapped to entrepreneurial thought, business leaders drive toward future goals with a vision of what’s next on the horizon. When entrepreneurial drive is applied to strategy, businesses change course with agility, respond to new opportunities with openness, and meet changing business landscapes. Each discipline strengthens the other.
Intertwining strategy and entrepreneurial process results in thoughtful vision and nimble business behavior in changing contexts. Successful businesses like Apple, IBM and Google have figured out the interplay between strategic thought and entrepreneurial drive, resulting in effective execution.
Takeaways
To enable your business towards successful strategic entrepreneurship:
1. Think and evaluate yourself strategically
2. Explore and promote sharing of new ideas
3. Make innovation a core strategy
4. Map strategic thought into entrepreneurial drive for results
5. Continually repeat the process
Take a cue from Apple, IBM and Google. To be successful in today’s challenging climate, it is not only possible, but arguably imperative, to be at once both strategic and entrepreneurial.
