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Renewing tech-company growth via radical adjacency

Table of Contents

  1. Summary
  2. Radical adjacency as a concept: evolution and examples
  3. The new strategic landscape: Why radical adjacency?
  4. Structure and strategy: four types of radical adjacencies
    1. Extending competency
    2. The use of infrastructure as a radical adjacency
    3. Radical adjacencies to enter or create new markets
    4. Radical adjacencies to transform the enterprise
  5. Success factors
    1. Radical adjacency as a fluid core with multiple, changing competencies
    2. Launching into a bigger market
    3. Reframing the strategic story
    4. Externalizing the core, resource attraction and partnership
  6. Key takeaways
  7. About Haydn Shaughnessy

1. Summary

For 30 years enterprise leaders have been encouraged to identify and build on a core set of competencies. But that is now over. Encouraged by the success of computer company Apple in becoming the world’s leading smartphone maker and the world’s most successful retailer, they must figure out how to build strategies to enter new, bigger markets.

This is the radical-adjacency approach: the decision to move into wholly new markets or to go to market with an entirely new class of product and to redefine the organizational form to succeed. The approach is called “adjacent” because it leverages a company’s experience but “radical” because the markets or technologies are several steps removed from the classic notion of an adjacent market or competency. Four strategies are emerging that embrace radical adjacency:

  • Extensible competency
  • Infrastructure utilization
  • New market entrance
  • Organizational transformation

Each of these involves enterprises in radical adjacencies away from the core. Successful practitioners of radical adjacency (Apple, IBM, Amazon, Google, Ericsson) tapped into one or more of the above. Their success built off four key factors:

  • Radical adjacency as a fluid core with multiple, changing competencies
  • Launching into a bigger market
  • Reframing the strategic story
  • Externalizing core processes

Key technologies make this possible: Cloud allows companies to partner and combine competencies into new service offerings, and mobile is forcing companies to be less and less monolithic and to take many small steps much more frequently to change how they function. Globalism, cloud, and mobile make it imperative to seek out the partner skills that give a company a new or persistent edge.

Source: flickr user marc falardeau