Goal of The New 7-S’s

While the traditional 7-S’s are concerned with capitalizing on creating a static strategic fit among internal aspects of the organization, the New 7-S’s are concerned with four key goals that are based on understanding dynamic strategic interactions over long periods of time. These four goals are

1. Disrupting the status quo Competitors disrupt the status quo of compe­tition by initiating the next dynamic strategic interaction to move competition up the escalation ladders in Part I, restart the cycles, or jump to a new arena. These moves end the old pattern of competitive interaction between rivals. This requires speed and surprise; other­wise, the company’s competitors simply change at the same rate.
2. Creating temporary advantage Disruption creates temporary advan­tages. These advantages are based on better knowledge of customers, technology, and the future. They are derived from customer orienta­tion and employee empowerment throughout the entire organization. These advantages are short-lived, eroded by fierce competition.
3. Seizing the initiative By moving aggressively in each arena, acting to create a new advantage or undermine a competitor’s old advantage, the company seizes the initiative. This throws the opponent off bal­ance and puts it at a disadvantage for a while. The opponent is forced to play catch-up, reacting rather than shaping the future with its own actions to seize the initiative. The initiator is proactive, while com­petitors are forced to be reactive.
4. Sustaining the momentum Several actions in a row to seize the initia­tive create momentum. The company continues to develop new ad­vantages and doesn’t wait for competitors to undermine them before launching the next initiative. For example, while U.S. manufacturers are doing remedial work in quality improvement, Japanese manufac­turers are now building key advantages in flexibility. This succession of actions sustains the momentum. This is the only source of sustain­able competitive advantage in hypercompetitive environments.

1. Disrupting the Status Quo

The New 7-S’s disrupt the status quo by identifying new opportunities to serve the customer, moving with speed and surprise, signaling, shifting the rules, and attacking through sequential and simultaneous thrusts. The pur­pose is to change a firm’s position on the escalation ladders by moving up to the next rung of the ladder, restarting the cycles, or jumping to a new arena of competition.

2. Seizing the Initiative

A key focus of the New 7-S’s is to seize the initiative—“to capture control of the strategic behavior in the industries in which [the firm] competes” and move the industry forward in such a way that the company using them makes the opponent reactive and demoralized. The New 7-S’s are con­cerned with creating a new and different future, altering or limiting the dynamic strategic interactions available to competitors.

The approaches needed to seize the initiative depend on the position of the firm and industry. For example, companies in the rapid growth stage of a product or service gain initiative by moving rapidly into the largest and fastest-growing segments, filling market space as quickly as possible and keeping out competitors with entry barriers as much as possible.

In the next stage, the “gradual build” stage when growth begins to slow, initiative is gained through control of the next generation of product in­troduction, anticipating competitive moves, and preemption of key second-stage and international segments, identifying emerging bases of in­dustry leadership, sacrifice of full coverage, and ability to clearly identify when points of negative marginal return are reached in each position.

As competitors move through the dynamic strategic interactions of each of the four arenas, they have opportunities to move to seize the ini­tiative by moving to the next rung of the escalation ladder or delaying competitors from moving ahead. As Kenichi Ohmae said, “In business as on the battlefield, the object of strategy is to bring about conditions most favorable to one’s own side, judging precisely the right moment to attack or withdraw and always assessing the limits of compromise.”¹³

The New 7-S’s are most directly concerned with seizing the initiative. New advantages are identified through understanding stakeholders and the environment. By positioning for speed and surprise and using signals, actions that shift the rules of competition, and simultaneous and sequen­tial thrusts, the company can move quickly and stealthily to seize the ini­tiative away from the competitors.

By controlling, delaying, or influencing the competitor’s movement up the escalation ladders, the company seizes the initiative. By continuing to control this movement, the firm sustains the momentum.

3. Sustaining the Momentum: Punch/Counterpunch Planning

Sustaining the momentum requires an approach to long-range planning that is quite different from the typical five-year plan. It demands, instead, “punch-counterpunch planning.” This is more like the type of strategy that a boxer uses in the ring to “plan” a boxing match. It is not a sequence of planned actions so much as it is a set of guidelines for exploring the opponent’s weaknesses, testing out one’s own punches, and moving from one opportunity to land a punch to the next. Companies traditionally op-erate more like the sumo wrestler, building up fixed strengths that limit flexibility. Commitment is deemed as critical to success. They move against opponents and rely on superior resources—financial (fourth arena) or know-how (second arena)—to literally crush the competitor. The strat­egy is straightforward. May the heaviest wrestler win.

Boxers, on the other hand, evolve their strategy in the ring. They work to develop speed and surprise. They hone their reflexes and understanding of the prerequisites for success. They develop a knowledge of their compet­itors. They do not plan out a sequence of punches, but they plan to use a combination of punches when the opportunity presents itself, anticipating the reactions of their competitors and following up. The boxer throws a left, blocks a right from his opponent, and then delivers a stunning blow.

The combination is planned, but at the same time it is flexible and may never be used if the opportunity for use never appears. And a big part of the planning that goes into the fight is the training before the boxer steps into the ring. The skill and agility the boxer brings to the fight is a flexible resource base that can be used in many different ways.

This punch-and-counterpunch planning is reflected most clearly in the final three S’s of the New 7″S’s. By shifting the rules of the game, compa­nies force their competitors to respond. Signaling by one company causes competitors to make missteps or to react too late or ineffectively to the company’s actions. Simultaneous and sequential thrusts are a sequence of punches that companies use to draw out the opponent and direct the flow of actions and reactions so it works to the company’s advantage.

One serious challenge that companies face in sustaining a series of ini­tiatives is “initiative fatigue.”¹⁴ In launching a rapid series of initiatives, companies bum out because of a variety of problems. Among the reasons for failure are the lack of clear overall purpose, unclear management com­mitment, and unclear responsibility for the initiative. Initiatives also fail because of poor communication and rumors, lack of training, improper performance systems to measure implementation, and unclear success cri-teria. These common sources of failure indicate that seizing the initiative is difficult, and fustaining the momentum through a series of initiatives is even mont challenging.

Source: D’aveni Richard A. (1994), Hypercompetition, Free Press.