Land and expand is a common strategy in situations where success is directly linked to the number of personnel deployed.
Land and expand is everywhere
In nature plants such as plantains (see this week’s cover picture) use this effectively, spreading out horizontally to block light from the surrounding grass as it competes for air, water and sunlight.
Many business strategies that are talked about, written and used are derived from military roots. For example Sinon unlocking the resilient ancient city of Troy with the Trojan Horse or the D-Day invasion of World War Two with its parallel set of attacks on Normandy beaches to establish a toe-hold back on the Continent.
Get inside the other’s territory.
Spread out fast so that you are hard to dislodge.
Backfill quickly as you move wider so you don’t get cut-off.
Businesses like to land and expand too
It’s also a business development strategy frequently used by professional services and consultancy companies. And while each person added to the endeavour adds more value than it costs – this can be a useful way of rapidly providing effective support to the client’s mission.
The risk is that the supplier and / or the client can fall into the habit of adding support without fully assessing the marginal value / cost balance of each increment. Then, before you know it, you (as a client) have become dependent on a supplier with services that are pre-destined to become less efficient over time.
Once you start to provide outsourced services using a land and expand strategy you are building up risk.
The problem with land and expand is that clients care about the risks of becoming reliant on external parties and locked into arrangements that become less efficient over time. So they set out to manage those risks in a number of ways. Some of these have perverse consequences such as locking out smaller firms that could provide the innovation required for success in the next business cycle.
What is the impact on client decision-making?
- They may avoid buying knowledge and capacity they need,
- Some may seek single-tender procurements so they get the people they trust the most,
- Supplier selection may be driven by relationships not quality, innovation or capability.
I think the heart of the problem lies with the relatively little attention that the marginal value / marginal cost ratio gets when each additional person joins the team. My observation is that service provision structures only get designed at the start of the contract but are not generally reviewed and amended to optimise the value of each increment during the lifetime of the contract.
I think that land and expand also reduces agility and value the longer it goes on.
But what is the alternative?
What about the opposite strategy?
Engage / Agree / Deliver / Review / Exit soon
…Be ready for referrals and repeat business.
‘Quick in / quick-out’ approaches favour smaller teams (1-7 people). They are therefore easier for smaller consulting firms to participate in or to lead. This strategy brings a different set of risks for the client but is generally much more agile.
What is an agile strategy?
– It does not ‘lock-in’ an end-point
– It focusses on near-term contributors to an end goal
– Requires review frequently (weekly or monthly), especially for opportunities & risks
– Is inclusive – involves the leaders at all levels in the organisation
– One that iterates around a cycle – imagine, prioritise, do, review [repeat]
Key point: Consider creative alternatives to service provision to increase your agility
Happy End of summer