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When you describe an investment as strategic, what do you mean? Will everyone that you work with understand this meaning?
Every profession has its own language. When medical doctors speak of Acute, Chronic and Malignant cases they have a specific meaning that is clear to them all. The power of this common language comes from its ability to rapidly communicate situations and enable collaboration on solutions between doctors of different cultures and specialities (holding conversations without lay-people understanding is just a side-benefit!)
This ability to clearly communicate and collaborate is also critical to creating an effective executive team. However, compared to doctors, executives lack the benefit of common training to forge this language. When terms like Value Proposition, Business Model, Core Competence or Strategic Initiative are thrown around, they are likely to mean different things to everyone. When you say “Our Target Customer”, is the same picture conjured up in everyone else’s head?
The academic definition of the terms isn’t important. What matters is that when your Executive Team uses them, you all understand each other. Given the varied backgrounds of most executive teams, the only way to achieve this is to go through a strategic process together when they are discussed.
Does your executive team speak a common strategic language?
Will you suffer merger culture clash? A simple rule of thumb before considering a merger or acquisition is to ask – does the value creation assumption require integrating large numbers of people? If it does – just walk away.
As the old adage goes, life would be easy, if it weren’t for other people. Mergers are no exception. Bringing together 2 organisations, each with their own cultures and ways of doing things to create a fertile hybrid is never easy. Corporate histories are littered with the skeletons of failed mergers – Time Warner/AOL, Daimler/Chrysler, Citibank/Travellers to name some of the highest profile ones.
Imagining the “natural end point” for media in the future will help Disney make better strategic decisions on their distribution today
For any strategic thinkers considering the future of media, this is interesting news.
Content has always wrestled with Distribution to capture the value in the media business, in a classic example of competition across the value chain
The guiding principle of the internet age is that “Content is King”. Distribution might change from DVDs to cable to VOD to streaming to mobile phones, but differentiated “must see” content would always find a high profit route to viewers.
Your corporate reputation is the first thing that impacts execution of your strategy
The Spartans had such a formidable reputation that they rarely needed to fight. It was enough for them to turn up on the field to ensure their enemies sued for peace. Your corporate reputation matters just as much.
Enduring businesses are built on values – but what do you do when your values lose you business? If they are true fundamental values, you must walk away.
The internal conflict at Cambridge University Press is a great illustration of when happens when powerful forces point in opposite directions – the desire to maximise profits and the desire to be true to fundamental values. There is no doubt that their business will suffer in China as a result of their decision to keep publishing the articles the Chinese government asked them to withdraw. This question is far from academic – at some time in the future, every single multinational in the world will need to decide how far they will bend to stay on the good side of the government in their most important market in the world. Apple has already removed VPN apps. This is unlikely to be the last request for censorship they get, and compliance puts companies on a slippery slope – we have already compromised our values, may as well do it again.