Six Principles for Strategic Migrations
Companies can make strategic migrations more successful by applying insights from a surprising place — the animal kingdom.
In the fast-moving landscape of modern organizations, it can be difficult to keep pace with competitors and adapt strategically. Companies, however, may be able to find inspiration from an unexpected place: the animal kingdom.
In the wild, animal movement types consist of station keeping, ranging, and migration. Migration is a unique kind of movement, with many counterintuitive behavioral oddities. When migrating, animals often pass by seemingly suitable locations with abundant resources on the way to a more optimal destination that serves a larger purpose for the species. The intuition and sense of mission typified by migration is what attracts us to the movements of sandhill cranes, humpback whales, monarch butterflies, and many other species.
Companies exhibit similar behaviors related to strategy. Some companies are content with the status quo, foraging within their home area and pursuing established strategies (station keeping). Others may recognize the need to depart from the home range and quickly accept the closest viable environment in which to compete — adopting a strategy of expending minimal cost and effort to locate a new environment (ranging). Still other companies exhibit the characteristics of true migration — driven by a vision and sense of higher purpose, they forgo suitable, tangential changes and short-term profits for an optimal, long-term solution. Companies can make such strategic migrations more successful by applying insights from nature.
The concept of migration in business has been thought of as synonymous with movement: customers moving between channels and competitors, companies moving into new geographic markets, and workers moving between organizations. However, while all migration entails movement, not all movement is migration. On one end of the spectrum, companies can exhibit station keeping or ranging movement, yet fail to move far enough afield to find an optimal fit for the organization. On the other end, they may move too far afield and aimlessly bound from market to market. The six principles of effective migration from the animal kingdom identified here can improve business strategy in your company.
Principle 1: Depart at the Right Time
In the wild, it’s imperative that animals recognize the appropriate time for departure, as poorly timed migration — either too early or too late — can adversely affect individual animals and their species in aggregate. In business, environmental considerations germane to globalization, technological advancement, and compressed product life cycles create high levels of market dynamism that may trigger strategic change. Increasingly robust competition makes it essential for companies to know when market conditions require a departure from current strategy, as companies have encountered strategy failure when they have departed too early or too late for successful migration.
As an example of too-early migration, Netscape founder Marc Andreessen correctly saw an opportunity to enter into the cloud computing industry, an industry expected to generate more than $400 billion by 2020. However, the timing of his migration into this area (LoudCloud in 1999) was too early in the technological evolution and consumer understanding of cloud computing, and the migration ultimately failed. Many examples also exist of companies realizing deleterious outcomes from late strategic migration. A classic example of late migration and its adverse impact is the U.S. automotive industry in the late 1960s. Automakers in the United States failed to act on changing global oil considerations and consumer preferences for smaller, more efficient automobiles, which opened the market to imports of smaller cars and slowly eroded their dominant market share.
Principles 2 and 3: Don’t Stop Too Soon or Go Too Far
In addition to knowing when to depart, animals must know when to cease their migration. Stopping too soon can mean they fail to reach an optimal location, but continuing too far can exhaust resources and result in harm. Similarly, in business, knowing how far to migrate one’s strategy is critical to success. On the one hand, not moving strategically far enough can be detrimental to the organization. For example, Redbox recognized the need for a disruption in the traditional video rental arena but stopped too soon in its journey away from the traditional, Blockbuster-style model in its kiosks. Had Redbox continued the migration to online streaming video, it might have attained a dominant share of the market, rather than entering the streaming market as a late entrant. On the other hand, companies have also failed to understand when to appropriately cease migration. Moving too far afield can result in a departure from core competencies or a fragmented structure unconducive to operational resources. As an example, in response to declining sales due to powerful competition from companies such as Walmart and Amazon.com, Sears ventured into several different areas, including insurance, real estate, financial services, and even internet service. These efforts, however, have been largely unsuccessful.
Principle 4: Morph Physiology for the Journey
Before undergoing migration, animals make physiological preparations to help them endure the rigors of the migratory process. For example, they often consume excess food to build up stores of fat for energy during their journey. Companies preparing for a strategic migration must also prepare for the journey by reorganization or freeing up cash for liquidity that may be required. Failure to do so can mean suboptimal outcomes for the organization. As an example, United Airlines launched Ted as a divisional brand to compete in the lower-cost airline market in 2004. However, United didn’t morph but rather maintained its old cost structure, which prevented it from competing effectively in the low-cost market. As a result, Ted failed to take off and was discontinued in 2009.
Principle 5: Follow an Appropriate Route
Given the challenges that migratory movements entail, it’s important that animals take an appropriate route. Unnecessary deviations from the route waste precious resources and can mean migration failure. For companies, before undertaking a strategic migration, it’s imperative to communicate a cogent plan for how the migration will occur. Organizations will have many members serving in a multitude of capacities, and all must be mobilized in the correct direction for the migration to be successful. When a strong strategic route is not conveyed throughout the organization, members may stray off the strategic path, wasting precious organizational resources.
Principle 6: Minimize the Trade-Offs Between Migration and Other Life Functions
Migration exacts a toll on members of the animal kingdom because of its requisite consumption of resources. Thus, sacrifices must be made on certain short-term ends, and animals must find ways to stay alive during the migratory process. Similarly, when strategic migration occurs in organizations, critical resources are consumed in the process. However, companies must keep running smoothly during the migration to avoid depleting their resources, which may mean failing before reaching their destination. One case in point: While eyeing a future automotive market expected to be comprised mostly of electric cars, General Motors migrated its strategy for this domain and invested heavily in the Volt brand. However, GM knew it would need ongoing resources during the slow transition in the marketplace, so it sustained its classic brands to help feed the expansion into the electric arena.
Improve Your Strategic Migration
You can use these six principles to improve your strategic business migration. Before beginning such a migration, market research is imperative. Failure to do research can mean a poorly timed migration, one that misjudges how far is far enough, or one that stays too faithful to existing strategies. Your company can use market research to optimize its migration timing and distance.
Once research is firmly in hand, resources should be assessed, because strategic migration is a resource-intensive endeavor. Aim to mobilize personnel, structures, and liquid assets before the migration and ensure that sufficient resources are available to sustain your organization through the migratory process. Finally, straying off the appropriate strategic path wastes resources, and companies should communicate clear strategic migratory instructions to make sure everyone’s effort is coordinated. Properly navigating the migratory process can help your company arrive at the right place — and at the right time — for marketplace success.
Jeff S. Johnson is an assistant professor of marketing at the University of Missouri-Kansas City. Prior to academia, he worked in inside sales, field sales, product management, and division management at Union Pacific Railroad in Omaha, Nebraska, and Los Angeles, California.
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