FROM peasant tops to pencil skirts: fashion is fickle and so is business — to be ahead of the game you need to be a top flight trendspotter.

You need to be aware of, and respond to, the changing world around you and be able to take advantage of the fashions in business thinking. But also beware of falling for the latest fad because you could be left high and dry — remember Boo.com? Mel Scott, a senior lecturer in strategic management at Cranfield School of Management, says: “The most damaging strategy of all is standing still.” All too often successful companies become complacent — witness Lexus’s cracking of the US luxury car market while others were idling.

Scott says that you need to be aware of what is going on around you: developments within your own industry, developments in other industries and also in the wider world: for example, high oil prices and the threat of terrorism are currently big business concerns.

He says that lateral thinking is a must: threats to your success can come from left field. Telex operators probably underestimated the impact of the fax, and likewise fax machine makers the impact of the internet. Dale Littler, Professor of Strategic Management at Manchester Business School, says that at the heart of good strategic thinking is the ability to think laterally and question the status quo. But although you need to be able to recognise the trends to follow, you also need to be able to weed out the fads. The key to not being part of the herd is to remember that the definition of strategy is to achieve a competitive edge and to develop the resources to maintain that edge. He suggests that if you are unsure whether something is a fashion or a fad, then test the water: buy a stake in or set up an alliance with a company in the middle of the trend.

So here’s a tip: the business trend of the moment is customer relationship management (CRM). Bain & Company’s Management Tools 2005 survey shows that the use of CRM — collecting and managing data about customers and then developing strategies based on that data — has grown by 40 per cent in the past four years.

“At the moment one of the central things is customer focus. Not just a little bit of market research, but trying to live the life of the customer and understanding their behaviour and values,” Littler says. For example, senior executives of supermarkets need to shop in their own stores and not rely on mystery shoppers, he says.

Stewart Hobbs, a principal with the consultancy Booz Allen Hamilton, agrees: “The huge thing at the moment is customer focus. We can now track and monitor customer feedback and understand the value of that feedback better than before.”

So ask yourself, do you feel lucky? Will your customers still have a reason to buy your product next year? Are you a fashionista or a flop?




DATA FILE

STRATEGY is a word that has been hijacked by academics and profiteers. It sounds important and it promises to give us a leg up in corporate life, if only we knew what it meant. In this ten-week series Career is translating some of the gobbledegook.


Here we talk to Cranfield School of Management (www.som.cranfield.ac.uk), Manchester Business School (www.mbs.ac.uk), and Booz Allen Hamilton (www.bah.co.uk). We read Bain & Company’s Management Tools 2005 by Darrell Rigby (bain.com)

Useful further reading: An Organisation your Customers Understand, by Robert Simons, published in the Harvard Business School newsletter Working Knowledge (hbsworkingknowledge.hbs.edu)

Next week: When should firms buy in strategy?

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