Since we’ve published Five Strategy Traps for 2018, we’ve gotten many nods in agreement, along with comments and messages from leaders across the globe telling us that the traps were only “all too familiar” to them.
The big question is really, how do we change it? How do we transform our organizations and those of our clients into something more agile and flexible? How can we radically rethink and rework how large organizations act and respond in the face of industry shifts?
To understand the strategy traps leaders are facing, and how they’re overcoming them, we reached out to a few industry experts for their take on the issue. Those interviewed included a strategy analyst in the energy industry, a finance executive in the aviation industry, and a professor in management and future societies.
Here are some of their insights around strategy traps and how we can steer clear of them:
1. Alignment is crucial
For a new innovative strategy to see success, alignment across the entire company and the Board is perhaps one of the key drivers.
“Misalignment between Executive Management and Owners / Board often leads to insufficient commitment to the new innovative strategy from the top, while underestimating the level of strategy implementation required will lead to a lack of commitment from the employees.” says Niels J. Kindberg, EVP and CFO of Jet Time.
There also needs to be an alignment of ambition.
“A new innovative strategy will not be sustainable if the Executive Management is significantly more ambitious than the Owners / Board, as this will lead to it being rejected by the Owners / Board, or fail during implementation.
Likewise, a new innovative strategy is not sustainable if the employees do not understand and adopt the new strategy.”
Kindberg suggests a thorough “due diligence” and alignment of expectations with Owners / Board be done before strategy development. Furthermore, the strategy should be communicated as an evolution rather than a revolution before strategy decision (approval / rejection) by Owners / Board. Stakeholder engagement should be established at all levels before strategy implementation.
2. Comfort zones kill good strategy
“The evolution of homosapiens dictate the human mind to evaluate the future and new ideas / changes based on known history and past experiences, which makes it natural for the human mind to have a skeptical approach to fast and radical changes.” says Kindberg.
“For example, if I deviate from past experiences, I am at risk of being eaten / killed by the lion. Hence, the human mind is struggling to grasp the faster and bigger changes we will be experiencing going forward, consequently ignoring the risk related to not accepting new ideas and not making radical changes. And so, the human mind is a strategy trap in itself and the question is: how can human behavior be re-programmed to embrace and adopt ever faster and bigger changes?”
A strategy analyst from the energy industry recommends that “CEOs should get out of their comfort zone, force themselves to have conversations with people outside of their bubble and to examine their company and leadership from the outside-in.”