CATALYTIC GROWTH MODELS
SHAPE YOUR INDUSTRY
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While many companies continue to use traditional approaches to strategy development and some even succeed in this way, Harbor has seen over and over that the biggest winners are those that take firm control of their growth strategy and shape their competitive arenas. These are the companies we call “catalytic.” Just as a chemical catalyst hastens the rate of a chemical reaction, companies with catalytic strategies shape their worlds at rates that take the competition’s breath away.
In chemistry, a catalyst works by altering the sequence of intermediate compounds that leads to the one ultimately desired. In catalytic strategy, then, the strategist must map out the sequence of strategic steps in order to begin thinking about whether a swifter sequence can be achieved by catalytic action.
SOW ACTIVITY, REAP WEALTH
What is the key to success for these companies? The short answer is that each of them has employed what Harbor Research calls “Catalytic Strategy.”
In chemistry, a catalyst is an agent that speeds the chemical reaction that produces a desired compound. Similarly, in business a catalytic strategy is one that hastens the arrival of a desired end result or state. Those results involve a “value compound,” a unique combination of technological and business system elements which, when offered to customers, results in accelerated market penetration, value chain advantage, or advantageous market structure.
Of course, simply “rowing harder” may hasten the arrival of this state somewhat. But in business as in chemistry, catalysis is in essence the process of sneaking around a barrier that others are struggling to climb, and thereby arriving at the destination much more quickly. In other words, it is following an entirely new path. The catalyst itself may be the person, partner or other entity whose introduction into the business situation creates the shortcut to an advantageous structuring of one’s competitive arena.
Sometimes a catalytic strategist succeeds by being the first to correctly identify clearly defined customer needs, and developing the value compounds that will attract the most desirable segments of those customers. In other situations, clearly defined customer needs cannot lead the way. In either case, the key to catalytic strategy is to create a unique business system, which puts one a leap ahead of others in shaping and attacking a market. A strategy is only as good as the system built to execute it.
WHAT VALUE ELEMENTS CAN WE COMBINE TO DRIVE DISTINCTION?
Flexibility, innovation, and the ability to move quickly are essential elements of catalytic strategy. But for many companies in technology driven arenas, the velocity of change in the marketplace and the number of variables in play exceed many managers’ ability to make confident and informed decisions. At too many companies, management’s natural response to this environment is to try to slow the world down so they can understand and control it. Companies do this by attempting to lock in their customers, signing binding and inflexible agreements with suppliers and partners, approaching new markets with traditional means, and acquiring emerging competitors simply to remove them as market threats. These actions, while seemingly logical, in fact often run contrary to effective strategy in the evolving digital world.
Even in this modern age of smart systems and the Internet of Things where computing is now migrating towards and embedding itself into the physical world of ‘things” established and traditional players like Rockwell Automation and Danaher are employing catalytic strategies to drive customer value and, in turn value and differentiation.
Successful companies actually accelerate the development of a market and use the resulting change and complexity to their advantage. Their unique and innovative business systems work to give them great advantage, even if competitors imitate the system. Catalytic strategies don’t just hasten market development, but help structure markets and competitive environments to give distinct advantages to the business innovator who moves first.
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