MAD Change Matrix

“If you dislike change, you’re going to dislike irrelevance even more.” A recent MIT Sloan Management Review article explains the MAD Change Matrix, defining 3 types of transformation strategies depending on the context.

Enhance Magnitude: Step up the execution of the current position/proposition in the market when the market is still attractive and the business has a competitive strength. For example, when Starbucks CEO Schultz decided to step back in and transform Starbucks’ eroding position, he focused on enhancing the Starbucks experience.

Reimagine Activity: Change how a product/service is created/delivered. This applies if the market is attractive, but the competitive advantage is eroded. For example, Netflix first disrupted the distribution of film content by video stores with mail distribution, then by introducing direct streaming.

Shift Direction: Shift the business to a different, more viable market, leveraging core competencies. If the market has become less attractive and has no real competitive advantage. Philips leveraged its R&D DNA to transition to a leading Health Care equipment and services player.

Are you focusing on the right type of transformation?