Adaptive Vs. Creative Strategy


The concepts behind strategic thinking are relatively simple. Look at your assets, your competitors, market opportunities, execution capabilities, and then mix it all together to maximize the outcomes you have decided are most important. In practice, doing that effectively is much more difficult than it sounds. Now throw a wrench into the process – the wrench of creative strategy – and watch the entire strategic thinking department freak out.

Strategy is, in general, adaptive. New market opportunities rarely catch entire industries by surprise. The moves of most companies are evident in advance, so it really becomes a game of small adaptations to new circumstances by offering new products, entering new lines of business, and using other basic strategic business moves. Once in awhile though, a company makes some discontinuous leap.

Creative strategy involves strategic moves that come as a surprise. Because such moves are unexpected by definition, you can't plan for them. Think of Apple releasing the first iMac, and re-defining the playing field for home computers and how they are evaluated. Think of Southwest, launching a flight network that isn't the hub-and-spoke model so common in the airline industry. Blue Ocean strategies are often creative strategies, because they re-define some key part of the industry in a way that no one expected.

Almost all literature about strategic thinking is geared to adaptive strategy, which makes sense because that is what companies need most of the time. As a result, creative strategies, when they work, work really really well.

How can you implement a creative strategy at your own company? Well, most likely you can't. It isn't just about creativity or innovation, it's about market opportunities and positioning possibilities that only line up on rare occasions. That said, here are three things I think can help keep you primed to generate a creative strategy.

1. Pay attention to social and cultural trends. Most business people watch demographic changes, but you need to monitor behavioral changes in addition to that. You can't launch a creative strategy around a mobile device until you reach a tipping point in society where most people have them and are comfortable using them. Keep an eye on these trends and you will eventually find one that you can use to re-shape your industry.

2. Invert. Charlie Munger says to always invert, and this is a great way to find creative strategies. Take standard industry dogma and flip it on it's head. For instance, radio used to be free and ad supported. Satellite radio inverted that model and made radio paid and ad free. Always be looking to invert in your industry.

3. Practice creativity. The things you do on a regular basis become habit for your brain, so practice being creative. You may have to generate 1000 wacky ideas before you find that one that is a strategic homerun, but a single great creative strategy can be worth the time and investment of those wasted ideas.

So keep an eye out for ways to shake up your industry with a creative strategy, but remember that what seems on the outside like a quick easy explosion to the top of a market is really built on years of hard work and preparation. Most people become "overnight" successes only after they have spent years preparing for it.