In the martial arts, the idea is either to feign a move or catch an opponent by surprise. The problem is that your body often telegraphs what you are about to do – your eyes move to the side just a touch, you hunch your shoulders etc. Although I often talk before I think, I did have a problem with this, and in exasperation my sensei exclaimed, “Stop thinking – your intelligence will just hamper your progress!”
Oh, how I have learnt to love that line, and quote it so often to interns who search for the holy grail of strategy.

There are two notable instances where intelligence has been relegated to the sidelines; where a strategy was either just decided upon (strategy as design) or came about through happenstance (emergent strategy). The former strategy birthed the iPod; the latter strategy introduced America to Honda. 1,2

In 1999 the amazing Sony NW-MS7 MP3 player was launched onto the market to liberate us once again to be able to listen to music anywhere, just as the Sony Walkman had changed our lives in 1979 with cassette tapes (if you don’t know what a cassette is, ask a wrinkly near you). By 2001 there were over 50 brands of MP3 players – hardly the market to look to for saving Apple from its previous year’s $344 million loss. Also, Apple had a shaky track record of introducing new products – anyone recall the Newton? The Quicktake? The Pippin?

Along comes Steve Jobs and makes very clear his attitude to market intelligence with Henry Ford’s quote “If I asked my customers what they wanted, they would have just said a faster horse.” He went into the MP3 player business, because of three reasons. Firstly it was growing, secondly we all listen to music, and thirdly no one had got it right. With iTunes he had a complete ecosystem for music (which none of the others had, even though Sony owned Sony Music) – so not only was music portable, but it satisfied the modern criteria of “I want it now”.

When Japan invaded America with motorcycles in the 1960’s, their success was described by the Boston Consulting Group as follows:

“Their market strategies are directed towards developing high volume, hence the careful attention that we have observed them giving to growth and market share.”

The Japanes executives who launched the motorcycles explained it a little differently: “In truth we had no strategy other than the idea of seeing if we could sell something in the United States. Mr Honda was especially confident of the 250cc and 305cc machines. The shape of the handlebar of these larger machines looked like an eyebrow of Buddha, which he felt was a strong selling point.”

What actually happened was that they used the 50cc machines to get around town – people liked what they saw and it started selling – mainly in sporting goods stores. This was uncovered by Richard Pascale in a paper he published whereafter this phenomenon became known as the Honda Effect.

So there you have it: strategy by design, or a strategy that emerges – both devoid of copious amounts of market intelligence’. Like a surprisingly fresh kick to the groin.

Ref 1: John Ashcroft. Apple from the iPod to the iPad – A case study in Corporate Strategy. Second Edition 2012.
2. Gerry Johnson, Richard Whittington, Kevan Scholes. Exploring Strategy. Ninth Edition, 2011.


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