The crisis rhetoric drives a noticeable change of attitude within the tech industry — an evolution from growth and abundance thinking to a conserving, safety-first strategic approach. Leading with strategy is essential to increase one’s chances of success during times of uncertainty. Even so, data shows that few businesses practice strategy. In this article, you will find a summary of methods and principles we have adopted by the Airnaus Strategy team to define visions that guide us in building outstanding digital products & services.
Economic slowdown changes attitudes.
The COVID-19 epidemic, the Ukraine war, and Brexit are all significant factors shaping the structure of the global economy, manifesting in supply chain disruptions, rising energy costs, and ongoing migration crises.
The recession is on everyone’s mind. The World Bank mentions the steepest global economic slowdown since 1970. On top of that, we have the climate crisis, political unrest, and misinformation on an unpredicted scale — all fueling our sense of uncertainty.
The economic crisis rhetoric and unpredictability prompt everyone in the tech industry, from start-ups to tech titans, to rethink their spending and investments.
From abundance thinking to safety-first
Starting at the top during times of economic slowdown, boards of directors and investors are scrutinizing the spending of tech leaders more closely. At the same time, inflation affects consumers spending — their expectations are higher while their spending power decreases.
The global economic and social uncertainty drives a change in attitude — from abundance thinking to a safety-first, strategic approach. This means that while the money is still being pumped into the tech industry, strategic innovations matter more than ever — ones that help reposition and strengthen business, generate value for the customers or improve efficiency.
Companies spend too little time on strategy.
Today, more than ever, leaders must lead with solid purpose and strategy to invest their resources wisely. Yet, data shows that strategy is not at the top of leaders’ minds. As many as 85% of companies spend less than an hour discussing a strategic plan every month. Thus, strategies are either dismissed or not produced at all.
Often, a strategy is a yearly document that, once created, is shaved in the corner and uses abstract terms such as “boost growth”. At the other end of the spectrum, we have corporate 100-page-long documents that are effectively indigestible for people who implement those strategies.
So, what is the strategy?
A strategy is not a lengthy document reserved for big companies. Every business or product should be clear on how it will position itself in the market. Strategy is precisely about that — a focused direction for your actions.
At Airnauts, we define strategy as a set of choices to achieve the best position on the market by delivering unique value to customers. The strategy is always rooted in your company’s purpose and takes into consideration any potential trade-offs. It can be as short as a single page as long as it helps you find your way forward.
Why is a strategy so important?
Roger Martin, one of the world’s top strategists, advocates that the case for strategy centers on learning. To learn, you must use the company’s collective knowledge to develop a theory about the best way to do your business and put it into action to test it. By repeating the learning cycle and soaking up the lessons that work best for your business, you learn more quickly than your competitors, thus increasing your chances of success.
Martin’s case for strategy is supported by data. According to survey data collected by Booz & Company over the course of nearly five years from over 1,000 organizations in more than 50 countries, the top 17 traits of the most effective companies are strategy execution.
In successful businesses, the staff is aware of how their day-to-day actions affect the organization’s purpose. A proper flow of information that follows an overarching vision helps them pick up the right initiatives with the highest potential and then share the learnings.
When resources become scarce, prioritizing acting around a well-defined purpose allows focus on things that make business sense and deprioritizes the less important details. This is only possible when information is well-distributed across the organization.
How do we define strategy at Airnuts?
To define strategies, we use several strategic design tools and processes: Scenario Planning, Cascade of Choices, System Mapping, and Customer Journeys. However, at its core the strategy process is based on the same essential steps that lead to defining the best way to play and win in your product category.
Step 1: Establish a shared understanding.
The first step in the strategy process is getting a shared understanding of where you stand. Typically, this happens solely between the executives that are invited to the table. To look at a company’s actions holistically, it is essential to bring critical decision-makers, gatekeepers, and executors to the table. Going over the ambitions with a diverse group gives a good sense of how your business works and where you want to go.
In this process, we identify challenges or inconsistencies that need to be addressed e.g.- How should the future be different from the present? What is not working well? How do you want to operate and deliver the product? What’s the overarching purpose, and are you fulfilling it?
Step 2: Bring in new perspectives and uncover opportunities for innovation.
A good strategy is about seizing the opportunity in front of you — whether incremental, like improving your current product or transformative, for example, creating a completely new service for a different customer.
Typically, the opportunity we are looking for is with the customer. Diving into users’ work allows for identifying how the customers see the product and defining the value users genuinely care about. The best opportunities are rooted in the problem. If you or your competitors fail to provide something, this is your chance for innovation.
In this process, the user is as important as the broader context — where is the market heading, and how will it change? Defining changes in markets, values, and behaviors helps find the right market fit.
Step 3: Evaluate, define, repeat.
This step answers the question: “what is required to deliver unique value to our customers? “
With the context now established, you should identify multiple ways to change by implementing your idea. In the last stage, we describe a range of preferred or achievable end-state results grounded in your business context. As a leader, you must be critical and evaluate all potential negative and positive consequences. Here, a diverse team is essential. Bringing different voices to the table allows for consideration of legal, operational, sales, and customer perspectives and verifying if the idea makes sense for your business.
Advancing through Strategy
The arrival at the best way forward is your strategy — the choice you made based on collective intelligence, intuition, and insights. The results of the strategy process should be simple enough so that the strategy can be distributed across your organization and understood based on clear guidelines on how you want to position yourself on the market against competitors.
However, laying out and sharing strategy is not an endpoint, but rather an ongoing process where you formulate, test and revise a hypothesis on how to best move forward. When verified and done with rigor, strategy maximizes the chances of success. This maximized chance and internal alignment on how you intend to achieve competitive advantage are crucial when uncertain times and fewer resources are on hand.
Incorporating strategy into a holistic product-centered approach
At Airnauts, strategy is a crucial component of our approach to developing innovative and successful products and solutions. It serves as the foundation of our work, which is executed through a user-centric approach, exceptional design, and robust technological development. Whether we are creating a web platform, mobile application, or AI-powered backend, our strategy ensures that we are always focused on delivering the best possible experience for our clients and their users and drive business success.