Nailing a Jelly to the Wall
A well-conceived strategy will always help you to make the most of your resources and the fascination with strategy is long standing, as readers of Sun Tzu’s “The Art of War” written in 5th Century BC will know. Sometimes in history however events transpire to change the strategic landscape and at those times the skills of the strategist are at a premium. I believe that we are at such a point today.
For a long time, the focus of business has been on growth and scale but today the real game is about value and the rules of engagement are different. With the ‘cloud’ and an intelligent use of outsourcing it is now possible to access the benefits of scale without owning the assets necessary to deliver them. For years a firm’s biggest cost drivers have been people and property, and nimble organisations with less of both of them are today becoming much more valuable. It is partly how a firm like Apple is able to generate an astonishing revenue of $2m+ per employee. Of course, Apple’s success and extraordinary value is not achieved on the back of a rigorous fixed cost reduction exercise, it is achieved on the back of extraordinary skills in brand building, customer engagement, innovation and creativity. These skills are the differentiating intangible assets which make them so valuable.
Intangible assets are key to the future and the most effective strategists will understand these assets, how to build them, manage them, track them and account for them. At the moment the evidence is that the skills and thinking necessary to do so are not prevalent. It is a challenging area because by their very nature ‘intangibles’ are difficult to pin down. As a boss of mine very early in my career explained when highlighting a particularly challenging task:
“It’s a bit like nailing a jelly to the wall.”