[IMGCAP(1)]Every firm has markets in which they focus with products and services. These entities (a firm, its markets, products and services) all begin in an Emerging quadrant, and then as they become a more stabilized entity, they move into a Growth quadrant, and over a period of growth they then move to the Maturing quadrant, and finally they move to the Aging quadrant, where they pass away.
Like it or not, every person and every company or firm will eventually die. The “trick” for the managing partner or CEO is to understand this inevitable fact, and do everything within his or her power not to allow the company or firm to move out of the Maturing quadrant.
This has nothing to do with the size of the firm or company. Who would ever have thought that Eastman Kodak would have died? It was a billion-dollar company! And what about all those smaller companies and firms who bit the dust as well, but of which we seldom hear about?
Eastman Kodak went bankrupt because consumers began using cameras that didn’t require film. What on earth was the CEO thinking? Who was accountable for the Eastman Kodak strategy, the company too big to go bankrupt?
From our experience in working with large and small firms and companies, it is the failure to take the integrated actions of a formal strategy that is the main cause for bankruptcy. Who is accountable for strategy at your firm or company? And who is accountable for developing a formal strategic plan?
The markets, products and services that a firm addresses have an impact on the quadrant position of the firm itself. If all the firm’s markets for its products and services are in the Maturing or Aging quadrant, it is illogical to think that the current position of the firm is in the Growth quadrant.
So assume the firm is in the Maturing quadrant of its life cycle. If you are the managing partner or CEO, ask yourself this question: What is the next logical quadrant that my firm will inevitably be moving into? Now you should be able to understand why the person accountable for maintaining the firm in the Maturing quadrant needs to be a strategist who can strategize (see my previous article in this series, Strategy is not a Game It’s War!).
Unfortunately, our studies show that only about 15 percent of firms or companies have a formal three-year strategic plan. Even those that do have one usually do not integrate it with their operational plans.
One can then see that if your market segment where your products and services are vested is in the Maturing or Aging quadrant, it is imperative that you move new products and services into new market segments, and fast.
That is the normal progression and purpose of strategy, to keep new and vibrant products moving into the Emerging quadrant so the firm itself can remain within the Maturing quadrant of its life cycle.
It is our experience that most managing partners and CEOs think their company is in the Growth quadrant and they fail to see the reality of where they are positioned. That is when “game-changing events” occur in the marketplace, pushing these firms and companies into the Aging quadrant of their life cycle. Once in the Aging quadrant, it is practically impossible to move the firm back to Maturing.
Each quadrant in the life cycle has a different strategy that must be implemented. Without knowing which quadrant your firm is actually in prevents the proper strategy from being executed by the executive team, the CEO and managing partner.
Without the proper strategy, it can happen to your firm as well. If the planned strategy of a company or firm is correct, any number of tactical leadership mistakes will not impact the overall success of its mission.
Greg Weismantel is CEO of the Epic Group, a strategic management consulting firm and advisor on strategy for small and large firms and companies. Its focus is on helping companies and firms analyze and dissect their strategy to support new and emerging businesses.
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