The Yo-Yo Business Strategy Pattern

In 1999 I spent the summer in Denmark taking a class in international business. I was really looking forward to living with a Danish family, learning about a new culture, and studying business from the European perspective. But the thing that excited me most, if I'm going to be totally honest, was that women go topless on the beaches in Denmark.

When I settled in, I planned to go to the beach as soon as possible, as did most of the guys in the class. Danish weather being what it is, there are many days not quite warm enough to go to the beach, even in the middle of summer. When we finally had a nice warm day and some time off of school to hit the beach, I was surprised that most of 20-something women didn't go topless at all. It seems that the nudity so embraced by one generation was taken for granted by the next generation. Younger women said that they preferred to cover up a bit a leave the guys guessing. The cycle had gone from covering up to exposing and then back to covering up. Despite my purely hedonistic intentions, I managed to learn a lesson about structure and change that has stayed with me ever since. The idea is that people's attitudes and ideas often move like a yo-yo. First they go one way, then they come back the other, only to go back out again.

It happens all the time. Political views, sexual attitudes, morals, values, etiquette, they all cycle out and back. What is the norm for one generation has changed a few generations later, only to change back again after a few more generations. The same thing happens all the time in business.

Have you heard something like "small is the new big" or "brown is the new black?" These are examples of one norm being replaced by another. This is an important concept because it exposes a part of strategy that people sometimes ignore – change.

Strategy has to change because the world is constantly changing. Businesses have gone under because they were too wed to an old strategy. What works in the past might not work in the future.

Take WalMart as an example. WalMart drove the bigger/cheaper retail model and became one of the top companies in the world, but the times are changing. Many people have started to think that things are cheap enough, and are discriminating on factors other than price. The yo-yo is changing direction. We are beginning to seek small and personal again. Will WalMart adapt? I don't know. Will they go out of business? Not in the forseeable future. But, all that talk of WalMart taking over the world has slowed down.

Change is difficult because when something works, we are hesitant to mess with it. But it is better to make your own product or service obsolete than to let your competitors do it.

Strategic planning is tough because no one knows the future. It's even tougher when you get excited about a pattern (like topless Danish women) only to realize you were too early or too late to capitalize on it. If you have a say in your company's strategy, you need to embrace change, continually analyze where your market is going, and most importantly accept and prepare for the fact that today's strategy may be tomorrow's fatuity.