The Importance of Time and Sensibility in Business Strategy

The Importance of Time and Sensibility in Business Strategy

When it comes to business strategy, it's not just about combining different elements, but also considering the element of time. This is something that Tadashi Yanai, the chairman of Fast Retailing, understands well. In an interview with Ten Minutes TV, Yanai shared his insights on the importance of time in strategic planning.

Yanai believes that a strategy's depth and breadth are determined by its temporal dimension. In fact, he claims that about 80% of strategic planning is influenced by the consideration of time. A person with a good sense of strategy is someone who can always say, "So, what?" and create a narrative around it. They have the ability to abstract and grasp the logic behind any specific situation. By internalizing this logic and being able to retrieve it in any given scenario, they demonstrate true sensibility in business management.

Sensibility, in this context, refers to the ability to oscillate between the concrete and the abstract swiftly and frequently. It is characterized by a large range of motion, high frequency, and agility. Sensible leaders can quickly perceive the essence of a situation and distill it into its most fundamental components. This ability to navigate between the specific and the abstract is what ultimately defines their sense of business management.

Now, let's shift our focus to the rise and fall of another company - Digg.com. In an article on Technology and Operations Management, several key points are highlighted. One of the main reasons behind Digg's downfall was the influence of "power users" - a select group of individuals who had an outsized impact on voting due to their popularity. Whenever a power user submitted a link, their followers would automatically upvote it. This created an imbalance in the platform's content and diminished its value.

Digg's mistake was prioritizing profit over its user base. The company should have focused on cultivating a strong and engaged community rather than solely pursuing financial gains. In the digital landscape, where new competitors can emerge overnight, it is the user base and the community that are difficult to replicate. Digg should have protected and nurtured these assets instead of making changes to its user interface to appeal to a broader audience.

Both Yanai's insights and Digg's downfall offer valuable lessons for business leaders. Here are three actionable pieces of advice to consider:

1. Embrace the temporal dimension: When developing a strategy, consider the element of time. Understand how different factors may evolve and interact over time and plan accordingly. Think beyond short-term gains and focus on long-term sustainability.

2. Prioritize your users and community: Your users and community are your most valuable assets. Nurture and engage with them to build a strong and loyal following. Don't compromise their trust and loyalty for immediate profit.

3. Balance the concrete and the abstract: Develop the ability to oscillate between specific situations and abstract concepts. This will enable you to distill complex scenarios into their fundamental components and make informed decisions.

In conclusion, time and sensibility play crucial roles in effective business strategy. Leaders who can navigate the temporal dimension and possess a keen sense of sensibility have a greater chance of success. By prioritizing their users and community, they can build a resilient foundation that sets them apart from competitors. Incorporating these principles into your own business practices can lead to long-term growth and sustainability.