Fighter pilot strategy for IT

The IT sector is constantly changing, with goalposts being moved and new challenges being set. ALLON RAIZ outlines a few challenges that IT entrepreneurs need to pay attention to.

Everything in the world moves quickly nowadays. However, nothing moves much quicker than the ICT (information and communications technology) sector. This brings a specific set of challenges to entrepreneurs in the sector, where the opportunities for success are almost limitless, but where the goalposts move so quickly that failure can completely blindside you. In my experience working with ICT entrepreneurs, the following represent particular challenges posed by the industry:

1. The need to be obsessed

First and foremost, and informing everything that they do, ICT entrepreneurs need to be more than just passionate about their industry they need to be obsessed with keeping up with the bleeding edge. Technology and the software that operates it develop at such speed that it is extremely difficult to keep up to date with the trends and developments that could impact on the products or services you are offering. Being completely immersed in news about developments in your industry is the only way that you, as an ICT entrepreneur, will be able to keep up with and outmanoeuvre your competitors.

2. Rapid obsolescence

As an entrepreneur’s company launches a product, they essentially need to be ready to bring out another one to keep up with the rapidly evolving needs of their customers. Almost as soon as products are launched in the industry, competitors emerge with slight yet significant variations. These can quickly remove any advantage that being first-to-market brings in the fight for market share. The key to address this challenge is to ensure that there is a steady stream of development, with product updates, add-ons, new products, and services lined up for launch.

3. The development of commercially relevant products

One of the biggest dangers that entrepreneurs in the ICT sector face is the pursuit of innovation for innovation’s sake. While innovation is certainly one of the key factors in ICT success, when it is sought for its own sake, it can lead to the development of products that are simply not commercially viable. If a product or service is not relevant to the needs of its targeted end user, it will simply not make money. When developing their products and services, ICT entrepreneurs must always be commercially savvy, and have a clear idea from the outset about how these products and services are going to be commercialised.

4. Sales and distribution channels

Being able to commercialise your product successfully is reliant to a large degree on having appropriate sales and distribution channels. However, given that the industry evolves so rapidly, and that products may be changing just as quickly, these channels need to be robust enough to withstand a completely different product range down the line.

Strategic thinking in the ICT environment

These four challenges and the general high-speed nature of the industry suggest that, to be successful, an ICT entrepreneur needs to be able to implement a strategy that allows them to adapt to their rapidly and continually changing business environment. One such strategy was developed by a US Air Force fighter pilot, John Boyd, and his strategic thinking has been successfully developed into a strong business strategy model: the OODA loop. OODA stands for Observe-Orient-Decide-Act, and these four steps are to be followed in a constant loop:

The first step in the loop is observation. In this context, observation is about knowing what is happening within your organisation. You need to be aware of how your company is doing financially and operationally, and to be keeping your finger on the pulse of customer feedback. When you have a solid understanding of how you are doing as a company, you will be able to make better judgements about your capacity to undertake any particular course of

action suggested by the following steps of the OODA loop.

While observation is inward looking, orientation refers to gathering information about the outside world. This step requires you to orient yourself with regard to trends in your industry, your competition, and the outside world (such as changes in legislation). The process of orienting yourself is essentially an information-gathering process, during which you will be developing your awareness of the various options that lie ahead of you. In other words, the orientation step is what will give you all the clues you need to identify which direction your company should be going.

Using your understanding of both your business’s capacity and the pressures and trends that you have oriented your company towards, it is time to decide on your plan of action. In his article, Business Execution Lessons from Fighter Pilots(i) , with regard to this step, business analyst Stephen Lynch warns:

Don’t fall into the trap of continuously ‚’improving what is’ when your strategic analysis points to the need to ‚’create what will be’ which could be something very different to what you are doing now. Just sitting there conducting business as usual and hoping things will work out is not a winning strategy!

The last step of the OODA loop is where you commit to your course of action and put into play all of the decisions that you have made in the previous step. Once the plans have been put in place and acted upon, it is clear that your company’s situation will have changed, and it is time to go back and observe the impact.

Implementing OODA

In the ICT world, being agile and nimble in strategic decision-making is of paramount importance. The key to success in implementing the OODA loop is to use it as a tool to accelerate the development and implementation of your strategy. Its strength as a strategic tool in the ICT industry is that it allows entrepreneurs to draw feedback constantly from the orientation step into their decision-making processes and then act quickly and decisively. This is what allows ICT companies to pivot, which is the secret behind the success of a number of Silicon Valley giants.

Indeed, Caroline O’Connor and Penny Klebahn say on the Harvard Business Review blog(ii):

Silicon Valley culture is built around great pivots ‚Äî a sudden shift in strategy that turns a mediocre idea into a billion-dollar company. Groupon began not as a local coupon business, but as a platform for collective action. Pay Pal started back in 1999 as a way to ‚’beam’ money between mobile phones, Palm Pilots, and pagers. Twitter was born from a stalled podcasting startup.

Being an entrepreneur is always a fight for survival but in the rapid-fire world of ICT, being able to strategise like a fighter pilot in a non-stop dogfight could be your secret weapon to come out on top.

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