â€œSome companies make things happen.
Some companies see things happen.
Some companies wonder that things happen.â€
This is one of my favourite management quotes because this is all strategy is about. I heard it in a lecture during my MBA course back in 2000. This was the time when the Internet was said to change the way business is done for ever and the New Economy was booming. This context had influenced my understanding of the quote for a long time. For me this was some sort of reminder that businesses should never rely on their current strategic position, however comfortable it might be. Businesses should always look out for new strategic opportunities, should scan the horizon for upcoming changes like disruptive technologies (which was a big buzzword at that time), and should try to change the rules of the game (another popular term).
You donâ€™t have to be a gifted strategist to understand that it is better to make things happen â€“ i.e. to be active and to drive changes â€“ than to see things happen â€“ i.e. just to react to changes. If you come into a situation that you wonder that things happen you probably are in serious trouble because it might be too late to react at all.
Today we have a different situation. There is a financial crisis which is probably followed by a crisis of the real economy in many countries. I guess if there was any chance to avoid an economic crisis it was given away by talking so much about the danger of a crisis that it will finally become a self-fulfilling prophecy. In this situation, the majority of companies belong to the categories that see things happen or even wonder that things happen. I suppose no company intentionally made these things happen. Hence, it is first priority for managers and business leaders to manoeuvre their companies through this crisis and to keep them in business at all. This task is difficult enough these days.
However, if I know one thing about the actual crisis it is that it will be over some day sooner or later. It doesnâ€™t take much strategic foresight to know that the business world will look different than. When this time comes, to which category do you want your company to belong? To those that make things happen, to those that see things happen or â€“ again â€“ to those that wonder that things happen? It is already today that business leaders can determine to which of these categories their companies will belong once the crisis is over. Besides the daily struggle for survival, they should devote some time to thinking about how the business world will look like after the crisis. There are some straightforward approaches, for instance:
- In many industries, there will be a higher concentration. Some players will be gone or be taken over by others.
- Customersâ€™ priorities will probably change. They might be more careful about their spendings and might prefer products with other characteristics, e.g. locally made, more durable, less risky etc.
- As for the financial services industry, we can be sure that there will be more regulation. The only question is how exactly this regulation will look like. Nevertheless, one can already try an informed guess about that.
Hence, it should not be too difficult to develop some realistic scenarios for most industries now. It is a good idea to keep those in mind even for todayâ€™s business decisions. Todayâ€™s decisions are not only about bringing the company through the next couple of days but also about positioning it for the future: If there will be less but larger competitors â€“ how will you compete with them. Are you in a position to put some struggling competitors on your watch list so that you might take them over once the time is up? If the new regulation for the financial services industry will reduce the industryâ€™s ROE, what will be your new value proposition for your shareholders? Now is a good time to go through your portfolio of strategic ideas, be they in experimental stage or just an unfinished thought in your mind. Those ideas might not have been a promising business opportunity in past times, but they might become more interesting in future.
The quote about companies that make or see things happen is not only valid for boom times when businesses try to outsmart competitors by trying to invent the next big thing technology or business model. It is as important in times of a crisis. While most companies are more than busy trying to survive or to minimise their losses, the smarter ones already think about the next boom. Those will be the ones that make things happen in future.