The past few years have been highly disruptive to many companies. There have been both winners and losers across many different industries. How companies react to disruption also varies. Risk-averse organizations may choose to curb investments and wait for the disruption to pass.
While this might seem conservative, it also carries its own risks. What are your competitors doing while you put the brakes on your investments? If they continue to invest, your company can quickly fall behind.
Some companies look at disruption as an opportunity. They see beyond the crisis and consider how their business model can change for the better.
An Example: Amazon Enhances Logistics and Delivery
While many companies were trimming costs and dropping strategic initiatives during the pandemic, Amazon added 400,000 new employees. This was not just focused on higher sales volumes but rather an expansion into a whole new business segment. Almost all of these jobs are in logistics and package delivery. In addition to personnel, Amazon leased 12 used Boeing 767s and ordered 100,000 electric delivery trucks that can eventually be converted to driverless vehicles. Could there be a better time to lease used aircraft?
While this expansion will help Amazon address a pandemic-driven growth in online orders, it is part of a larger expansion into logistics and package delivery. This move will make the company less dependent on FedEx, UPS, and the Postal Service and will eventually transition to a competitor of those organizations – Amazon has indicated that this service will eventually be offered to businesses and the public.
This is classic Amazon: Build an internal service and then transition it to a business. Amazon Web Services (AWS) was the first example of such a move and it now accounts for over 40% of Amazon’s revenue.
A Good Strategy Improves Agility and Execution
At the beginning of the pandemic, I wrote about the importance of rethinking your business strategy.
Yes, cost containment and limiting risk are important in times of crisis but disruptive events are also opportunities.
Agile Opportunities
Contracting your business during a crisis might seem like the right answer but investing is often a better move. Amazon surely had this expansion in its business plan but quickly launched the plan in March as the realities of the pandemic surfaced. A good business strategy allows for this type of agile and opportunity-driven execution.
This is a bold strategy with huge potential. Of course, not all companies have the resources of Amazon – just imagine having the capability to hire 400,000 people in just 6 months!
But all companies are continually making investments to improve their business model. Disruptive events are an excellent time to re-think your strategy and investments.
A strong strategic planning and analysis capability driven through Enterprise Architecture and Business Architecture can help your company prepare for disruption.
What is your bold move for 2023?
We hope you are finding new ways to thrive during this time, and that you’ll reach out to us for guidance along the way. We’re here to help.
