Strategy in a time of disruptive change

Strategy in a time of disruptive change

by Marc Dowd, May 7, 2015

Strategy in a time of disruptive change.

I have worked with some of the world’s largest organizations, and have found that managing sudden pervasive change, or disruption as I prefer to call it, is one of the things for which most companies are least prepared. This should seem counter-intuitive because in order to have survived and become big, at least in theory, a company needs to have started by being disruptive.

However, while my focus has often been on the “vectors of disruption”, namely the technologies or changes in the environment that cause the conditions for disruption to appear, it is my psychology background that really enlightens me when helping people to manage disruption, be that disruption to their companies, to their industries or to themselves.

What I have seen is that companies all too often often reward behaviours that are not in their best interests. Two examples are:

* Repetitive Behaviour: namely rewarding past success more than future potential; and
* Inductive reasoning: by which I mean actively ignoring or minimizing real, changing situations.

When massive change does loom on the horizon, such as a loss of market share, or a reduction in competitive advantage, or new entrants into the market place, or new business models, the response is sometimes little more than organized panic. Strategy tends to become characterised by simple verb-based tactics:

Buy!”, “Cut costs!”, “Fire!”, “Innovate!”, “Discount!”, “Divest!”, “Blame!”.

Research shows that tactics such as these can be triumphant in the short term, but all too often fail when applied as long term strategy, especially when faced with disruption.

My years working in the field of strategy have shown me that long term strategic plans often become mandalas that can be held up to anyone who questions, and/or mere justifications for things staying the same. There may well be a place for 5-year roadmaps, but all too often they are not balanced by an options-based view of the future, and in this fast-evolving world, the strategy process has to be flexible enough to change.

If I were to create a strategy for your company right now, I would want it to build inside your organisation a common belief amongst all the personnel that the company is resilient, responsive and responsible , that it is guided by a strategy that can flex without breaking, and that it has more than one path.

Leadership engenders belief. Strategy is the definition of leaders direction, not a replacement for leadership. A static strategy today is the sign of poor leadership.

If you lead your company towards an understanding that change is inevitable and necessary, you can escape denial (another psychological construct) and focus all your energies on growth.

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