Management strategy and industry evolution are closely tied together for the modern business leader. In today’s business world, it is critical to be able to adjust to one’s environment. While in the past, companies could just set a general operating strategy and subsist on that for years on end, things have shifted recently. Industries are more dynamic, with so-called tech disruptors coming in to shake things up in some instances. In light of the modern challenges of the business world, it has never been more important for a leader to understand the interplay between management strategy and industry evolution.
One of the most important ways in which these two factors interact has to do with technology. Technology has made industries evolve more rapidly. Today, industries are shifting quickly when new companies are able to introduce technologies that change the way consumers do business. The shifts in consumer expectation can change what every company in the industry needs to do. For instance, one can think to a simple example of a hotel owner who likes to use traditional keys in his hotels. He likes the natural feel of them and thinks that other forms of technology are both expensive and cumbersome. While he might have an idea that will work in the abstract, he is working within the bounds of an industry, and consumer expectations can shift over time if the hotel owner is not careful. What happens when he looks up and the rest of the hotel industry has not only moved on to key cards, but has also moved on to apps that allow people to open the door from their phones? What will he do when his competitors are all advertising these tools not just as tools of convenience, but as tools of safety in a world where things are increasingly scary? When this takes place, it is critical for a business leader to be dynamic and flexible. It is one thing to have a plan to be an industry leader by bucking the general flow of the industry. It is another thing entirely to be caught flat-footed and without a plan on how to proceed moving forward.
Management strategy and industry evolution also can dictate the way in which a company recruits and handles its people. One might look at the current expectations of the employees who work at the world’s best companies. Today, companies like Google and the like are bringing in people with more flexibility. They are focusing on people with different kinds of backgrounds who are able to add to the corporation’s bottom line by contributing with good thinking. This is something that is very important for the those companies because it allows them to connect with modern consumers. When these kinds of changes happen in an industry, all companies have to adjust or they will risk falling behind in a major way. Ultimately there are expectations on the part of consumers about how a company will conduct itself in hiring. Today’s world has seen a shift toward more corporate social responsibility, where good and smart consumers know whether companies are dedicated to diverse hiring. When a company is caught flat-footed on this issue, it runs two particular risks. First, it runs the risk of not being able to communicate with and sell to customers that are shifting constantly. On top of that, the company runs the real risk of losing the trust of consumers, who tend to value those companies that are willing to do the right thing in a world full of companies that are not doing the right thing.
Likewise, one has to adjust one’s management strategy according to the competitiveness elements in an industry. The taxi industry is one that has been dealing with changes over time. They have been pushed around by Uber, which has come in and changed the way consumers think about transportation. All of a sudden, Uber was taking on the taxi industry altogether as being slow, inefficient, rude, and costly. Uber was going after state governments and providing free rides so that people would get hooked on its technology. The taxi industry had to make a choice. It could maintain its existing management strategy, believing that people would simply recognize the yellow cab and want to ride in it. It could also change up its management strategy in order to effectively add technology and try to fight off Uber and companies like it. These things happen quickly, which makes these choices even more difficult. There are certain times when companies just do not know which way to turn and they can get run out of an industry very quickly. Blockbuster is a good example of a company that was not prepared to act when it needed to act, and as a result, it went out of business. Business leaders have to be ready to be dynamic in this regard so that they can stave off extinction while keeping themselves competitive in the public eye moving forward.
Ultimately the market should not always be able to move the company, but the company must always keep track of where the market is. Companies that are foolish just expect consumers to keep coming to them despite the changes in an industry. Those that are sharp are always looking for new and unique ways to keep themselves relevant, even while they stick to their core values in order to maintain some semblance of an identity.