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Eric Schmidt, the former CEO of Google, offers a unique take on business strategy that emphasizes looking ahead and anticipating future trends rather than just focusing on current successes.
Photo: JD Lasica / Flickr cc
The Flaws of Traditional Strategy
Schmidt points out a common problem in how many businesses approach strategy. Companies often start by assuming they are the best and that their current products will ensure future success. This inward-focused mentality can lead to overconfidence and a lack of preparedness for real-world challenges.
The Importance of Looking Ahead
Instead of this traditional approach, Schmidt advocates for a strategy centered on predicting what the world will look like in five years. This means considering questions like:
What will people be doing?
What will customers want?
Where will costs be?
How will networks and technologies evolve?
By spending time on these questions, businesses can better align their offerings with future demands.
Learning from the Media Industry
Schmidt uses the media industry to illustrate his point. Some media businesses are thriving, while others are struggling. These outcomes were predictable years ago. The successful companies likely spent time planning for the future, while those in trouble might not have considered what changes were coming.
Examples of Forward-Thinking Success
Several companies have thrived by adopting a future-focused approach:
Netflix: Originally a DVD rental service, Netflix anticipated the shift to digital streaming. By investing in online streaming and original content, Netflix became a leading player in entertainment.
Apple: With the launch of the iPhone in 2007, Apple foresaw the importance of smartphones and mobile computing. This vision transformed the company and the tech industry.
Tesla: Elon Musk's vision for electric vehicles and sustainable energy positioned Tesla at the forefront of the automotive industry. By predicting the demand for electric cars, Tesla led the market with innovative technology and infrastructure.
Proactive Planning and Adaptation
Schmidt stresses the need for proactive planning. Businesses should regularly evaluate their long-term plans and consider different strategies. This might involve new approaches or even selling the company if necessary. By being proactive, businesses can stay ahead of the curve and avoid potential pitfalls.
Conclusion
Eric Schmidt's approach to business strategy highlights the importance of looking beyond immediate successes and focusing on future trends. By understanding what the world might look like in five years and aligning their strategies accordingly, businesses can better position themselves for long-term success. Following Schmidt's advice means thinking ahead, planning for the future, and being ready to adapt to changing circumstances.
Listen to Eric Schmidt:
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