When Steve Jobs came back to Apple as the CEO in 1997, Apple was literally a few months away from bankruptcy. The first thing that Jobs did was shut down 70% of the company’s product lines. In doing so, he turned a forecasted $1billion loss into a $300million profit. He then deployed the strategy where the Mac would be the center of everything Apple did – kind of like a ‘hub and spoke’ strategy.
What did that look like? With the Mac at the center of everything Apple produced, they then moved ‘adjacently’ by creating products like the iPod, iPhone, iPad and iWatch that all worked in concert with the Mac. Applications like iTunes, iPhoto, iMovie, Apple TV, Maps, etc., all fit with their hub and spoke strategy.
Then Jobs started down the path of ‘Creative Destruction’ – meaning that he started to cannibalize his own product line. The iPod was replaced by the iPhone, meaning all your songs could now fit from one device… the iPhone.
Let’s talk about how this strategy relates to you and your business. Start by looking at the diagram below:
Your business has created, and delivers, value to the market; that is your Unique Selling Proposition (USP) or Distinctive Advantage. Or as I like to call this, “Your Secret Sauce.” It is that ‘something’ that your competitors do not have and, your customers see that value. In order to strategically grow and be the most profitable, it is this area that you need to focus your entire organization around.
Then as you grow, grow adjacently into a space that fits with Secret Sauce and the DNA of your team and culture.
This is also where you may need to engage in ‘Creative Destruction’ and cannibalize part of an existing product or service. Why? Well the market shifts and changes and, these days, the market does it at an extremely fast rate. If you don’t change with the market or ‘change the market,’ you will be left behind.
Remember Blockbuster? They didn’t deploy Creative Destruction. Netflix cannibalized their DVD business and look where they are.
Retail names that filed for bankruptcy in 2020 like JC Penny, Aldo, Neiman Marcus, PierOne Imports, J Crew, and Sears all watched while Walmart ‘Creatively Destructed’ their retail business. Today close to half of Walmart’s business is from online orders.
Remember Kodak? They once held the patent for digital photography. Creative Destruction of their film business could have saved them.
When you are looking at building your strategy for growth, look at why customers buy from you and be true to that Secret Sauce and then grow adjacent – maybe even grow adjacently through Creative Destruction.
Robert Murray is a Vancouver, BC based Business Strategy Consultant, #1 Best Selling Author, International Keynote Speaker, and TEC Top Speaker of the Year for 2018. For further advice, insight and inspiration on how to unlock your inner leader, follow Robert on Twitter, LinkedIn, and Facebook.
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