When business opposites attract

In business as in personal relationships, opposites do attract. Companies possessing different markets, capabilities, technologies and products (MCTP), which on the surface bear little resemblance, can share some “thematic” similarities (i.e. synergies) which can open up intriguing business opportunities.  These opportunities could range from leapfrogging into new markets and preempting competitive threats to leveraging complementary product technology or augmenting internal capabilities.   Very often, thematic similarities are missed by industry experts who view MCTP through traditional analytical frameworks or by the barriers imposed by management systems. To outflank competition, managers would be wise to recalibrate their product and strategic planning methods to include thematic analysis. 

In a recent edition of the MIT Sloan Management Review, Professors Michael Gilbert and Martin Hoegl outlined the importance of a dissimilarity-based planning framework.   According to the authors, most managers implicitly use a conventional taxonomic paradigm to understand their competitive position.  A taxonomic way of thinking looks at the degree by which a company, product or technology is similar (i.e. complementary, congruent or synergistic) based on how many features or characteristics they share in common. Taxonomic similarity underpins many popular management classifications including the Standard Industry Classification (SIC) codes – which defines industry boundaries – and the International Patent Classification system – which categorizes different types of patents.

Many firms understand that they may be overlooking opportunities and threats by only using a taxonomic style of business analysis.  With the help of advanced innovation techniques and cognitive psychology, managers now have a new approach – thematic similarity – to uncover strategic opportunities. Thematic similarity is about how two disparate characteristics functionally interact within the same event to create synergistic value. 

Thematic similarity looks beyond surface taxonomy similarity of with how things do interact to how things could interact. Thematically similar companies, products and technologies tend to be taxonomically dissimilar. For example, GPS technology and automobiles perform different roles but are thematically congruent within the driving experience.   Done properly, thematic analysis can be a powerful tool for addressing customer needs, improving operational performance and enhancing competitive position.     

Understanding MTCP at the thematic level is not always easy.  Most strategists are not trained or encouraged to think thematically.  Compelling opportunities are often hidden and difficult to weave together.  As a result, finding and exploiting thematic opportunities can often take some time. For example, it took smart phone manufacturers (Apple’s iPhone to be exact) 6 years to integrate 2 location-focused technologies, GPS and digital cameras, into their products.

There have been many examples of winning dissimilarity strategies,  two of which include: 

Intel purchases McAfee

Most industry pundits were baffled by chip giant Intel’s 2010 $7.7B acquisition of McAfee, a leader in anti-virus software.  Both firms compete in two dissimilar markets with two different strategies etc. While being taxonomically dissimilar, these firm’s MTCP enjoyed a high level of thematic similarity.  Intel claims that acquiring McAfee will dramatically enhance its presence in the mobile wireless space, a rapidly growing market of internet-connected devices that increasingly is being driven by security concerns and requirements.

Launch of Google Maps for Mobile

At first glance, Google Voice Search and GPS technologies have little in common from a taxonomic perspective.  However, in the context of cell phone usage both these tools provide significant value for someone looking for a Starbucks or checking movie listings in their hometown.  Google understood this thematic similarity and launched Google Maps forMobile in 2008.  This product has enjoyed strong user reviews and has helped boost advertising revenues.

How do you enable thematic thinking in your organization?

1.  Follow your mission and vision

A powerful mission and vision can inspire thematic thinking. If you don’t have one, develop and communicate an inspiring yet pithy credo that focuses on the customer yet places no artificial boundaries around how you serve them.

2.  Unleash the staff

Employees need the time and tools to think thematically.  Highly innovative firms like Google and 3M stipulate that each employee spend a designated amount of their time on blue-sky strategic thinking and problem-solving.   To unlock thematic thinking, companies can leverage proven innovation tools like simulations, brainstorming and thematic-driven training

3.  Bring in new blood

New perspectives can challenge analytical dogma and catalyze thematic analysis.  Institute recruiting policies that actively search outside the industry and foster employee diversity.  Internally, rotate people through different departments – especially sales, service and product development – so they are able to see the business through multiple lenses.

4.  Remove organization barriers

In many cases, management systems, structures and processes reinforce traditional thought patterns and habits. Organizations should look to align thematic approaches with a firm’s incentives, processes, and strategic planning methodologies.  Measures could involve including R&D experts in strategy development, involving external consultants in planning exercises or bringing customers directly into the product development process.

A thematic-based planning framework can deliver breakthrough business strategy and product innovation.  This approach, however, will have important implications on how companies deliver on customer needs, design their internal systems, leverage technology, and pursue M&A deals.  The first phase begins with the leadership team setting ambitious goals, rethinking their business and understanding what their customers truly want.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.


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