I wrote this over on Forbes a couple of months back. It’s really relevant to the Elastic Enterprise so, forgive some of the duplication, I wanted to air the issues again. This was written when I was trying to introduce the term and the idea. Another reason for raising it is we are very interested to hear of examples of radical adjacency – those that are working and those not. Seen any? Would you like to comment?
Anyone in any doubt that old strategy is dying should take a look around at what companies are doing in frontier markets, business model innovation, reverse innovation, open innovation, corporate venturing, new business incubators, and most importantly radical adjacencies.
This long list of new strategic approaches to business is full of attempts to sniff out where advantage will lie, in future.
Some of the interesting plays in the strategy world often go unheralded, yet they represent a rewrite of business rules, a new playbook, sketched out, in many cases, below the radar.
This playbook of future strategy, as yet in note form, sometimes gets articulated only in its failings (for example through CISCO’s Flip experience) so maybe we ignore it, at our peril.
One big part of the playbook is radical adjacency, a move adopted by CISCO with its video player.
CISCO is a good example of a company trying out radical adjacency – the move to redefine core competency and to create a platform for extreme market adaptability, to move into markets where executives have little or no experience – but there are others. Apple Inc is the classic case (from computers to music players to smartphones, advertising and TV), Google too of course, Amazon.com. CISCO’s attempts have particular value because adjacency is an explicit objective of the company.
Bruce Upbin, earlier today, pointed to an example of a start up, Jawbone, evolving a radical adjacency strategy in its investor rounds. Jawbone makes mobile speakers. It has moved into the medical device and monitoring market.
Here’s another example of a radical adjacency.
McLaren is one of the leading Formula 1 Racing cars of all time. McLaren is using its skills in real time data analytics, learned on the racetrack, to address remote health data management. Their adjacency takes them from mechanical to human telemetry.
The idea behind a radical adjacency can be that simple – but executing even in close adjacencies is notoriously fraught with problems.
One of the most famous cases is Blue Circle, a UK cement company that moved into lawn mowers, figuring that the home market was theirs for the taking. It ended in tears.
Adjacencies currently fail more often than they succeed so the radical moves companies are making, right now, are high risk. They are not just adjacencies that take their best products into new market segments but instead are real big plays, taking the company outside of its core. No doubt scribbling notes in the margins of the new playbook as they go.
We’d be interested to haer any examples you might have of radical adjacencies like CISCO and Flip, Google and Motorola, HP and Autonomy, McClaren and health monitoring.