Professor of Strategy
Traditional strategic models focus on growth - and how to face up to the competition. But how do you respond to shocks and major shifts resulting from natural disasters, pandemics or geopolitical crises? Most companies have risk management procedures in place, but turbulence also comes with opportunities, next to risks. In his book on Strategy in Turbulent Times, Professor Kurt Verweire sets out 4 turbulence strategies that can help companies not only to survive but also to thrive.
Core transformation is one of four strategic options that companies have to deal with turbulence. In this strategy, firms do not create something entirely new but instead adapt their core business to withstand the challenges posed by turbulence.
In this particular situation, the turbulence directly targets the core of the business, leading to potential revenue loss and reduced profitability. To counteract this, companies adopting core transformation build a metaphorical ‘tugboat’ instead of a speedboat. This involves developing new products and capabilities, which are then integrated back into the existing business – a process which bears more resemblance to transformation rather than pure innovation.
In his book on Strategy in Turbulent Times, Professor Kurt Verweire sets out 4 turbulence strategies that can help companies not only to survive but also to thrive. In this video, he explains the Chameleon strategy.
Verweire acknowledges that adopting core transformation is challenging for firms, citing examples from his book, such as KBC's approach to digital transformation and Hilti's introduction of fleet management. Additionally, he discusses Tag Heuer, the watch company of Louis Vuitton, dealing with the impact of Apple's smartwatch.
Drawing an analogy, Kurt labels core transformation as the Chameleon strategy. Just like a chameleon changing colours instantly, firms need to adapt and transform their core business and capabilities rapidly. This comparison highlights the need for companies to be flexible and dynamic in responding to the challenges presented by turbulent times.