How businesses can out-adapt, out-innovate and outmanoeuvre their competition.

The U.S. Army uses “active flexible response” to outmanoeuvre its enemies. The approach emphasised adapting to situations rather than adhering to absolute rules.

In dynamic environments where you need to navigate uncertainty and stay ahead, a more dynamic and creative approach is needed.

Take Netflix for example. It went outside the ‘rules’ of traditional business and entertainment to achieve success.

1. Subscription over pay-per-view:
   While the entertainment industry focussed on pay-per-view or purchase models (e.g., renting DVDs or buying movies), Netflix introduced a subscription-based service. This allowed users to access unlimited content for a monthly fee, changing how people consumed entertainment.

2. Embracing streaming early:
   When streaming technology was still in its infancy and internet speeds were not as fast, Netflix bet on streaming in 2007. Others were focused on DVD rentals, but Netflix made the shift toward digital, disrupting the physical rental market (e.g., Blockbuster).

3. Original content production:
   Netflix broke from the industry norm of relying on third-party studios for content. It started producing its own original programming, beginning with House of Cards in 2013. This was a major risk, given the high cost of production and uncertainty about how audiences would respond. By controlling its content library Netflix also reduced the risk of losing key shows to competitors.

4. All-at-once availability:
   Netflix broke the traditional model of releasing episodes weekly by adopting a "binge-release" strategy, where entire seasons of shows were released at once. Viewers could watch at their own pace, fundamentally changing how people engage with TV series.

Here’s how you can apply this approach to your business.

1. Understand the rules before breaking them. Study the environment to identify the governing principles. This will give you ideas about what’s possible.

2. Analyse the outside world. The more you internalise external dynamics, the more creative and resilient you’ll become.

3. Look for opposing opinions. Actively look for people who have opposite opinions. Work out how you can use the negatives as positive challenges for change.