Strategy Hack #5......blind to disruptors


This post marks the half way point in our review of common ways that leaders avoid putting time and resources into strategic planning. In each area I provide a definition, some diagnostics and a treatment recommendation. If you are interested in the other Strategy Hacks, please the other blogs on this site.


Past is Prologue: Even intelligent leaders and their organizations can become complacent. Business is turning over quite nicely; the bottom line looks good; there are no red flags of staff turnovers. Leaders may even be winning awards from their peers. No need to change course or, in fact, change anything. Right? Not really, not at all.


Diagnosis:
In private interviews with all formal and informal leaders, inquire about their personal beliefs in the sustainability of the current business conditions and results. Ask for details about what change forces or conditions each is aware of and which are most likely in the near and mid-term. Ask about personal and corporate plans to counter or manage each of these situations. Ask about trigger points, point responsibilities and contingency plans.
If results are not clear, detailed and consistent across all leadership positions, there is a problem.


Treatment:
When things are going well it is easy to assume that state of affairs will continue. This self-satisfaction becomes smug very quickly. There are three thought biases at work to maintain this delusion: confirmation bias, conservation bias and linear thinking.
Confirmation bias blinds us to information that is at odds with our preconceptions. If we think that all is well at work, we will not even notice the initial signs of transformational change inside and particularly outside the organization. Even when evidence of those changes is forced upon us, conservation bias lets us favor the old signals over the new emerging information. Taxicab companies were slow to accept the public support for UBER because they maintained their bias for information from traditional channels like the city regulators.


Linear thinking is even more pernicious. This thinking fault is supported by the universally simple trend analyses so popular in the financial and banking industries and ubiquitous in sales management. Past data is mathematically projected into the future: if sales have risen 5% per year for three years, next year's sales are expected to be 5% better than the current year. These projections are invariably straight-line projections: all variables are presumed to continue to function in the future as they have in the past. This presumption is regularly proven false, and yet we persist. It took years before the server manufacturers recognized the effect that cloud storage would have on their sales potentials. Textbook producers have ignored the phenomena of open source educational materials for a decade.
Work with the organization to develop a thorough futures description. Deploy disciplined foresight science to detect and present evidence for alternate likely futures 5, 10 and 15 years out. Help the organization work through these possibilities to identify a small range of preferred futures. Begin aggressive strategic planning to achieve these preferred futures and correctly pivot when required.

 

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