Over 40 percent of companies that face the Corona-crisis has weakened their competitive position. Just 30 percent have increased their competitive edge by business-model innovation. Unfortunately, management doesn’t have an extensive toolbox available to strengthen the company’s competitive position. The key problem is that the vast majority of companies don’t have a Strategic Competitive Intelligence Capability in place to gain maximum success from business-model innovation.
Many management books have been published, however only a few have had great influence on management today. Think of the books of Michael Porter on Competitive Strategies in the 1980s, “Competing for the Future” of Hamel and Phrahalad 1n 1996, “Only the Paranoid Survive” of Andrew Grove in 1996, “Good to Great” of Jim Collins in 2010 and Nassim Taleb’s “Black Swan” in 2007 and “Antifragile” in 2012. “Humanocracy” is the new book in 2020 of Gary Hamel on replacing bureaucracy, which might be seen as another “gamechanger”. Humanocracy leads to exceptional competitive power with unique competitive advantages, difficult to copy for your rivals.
We are convinced this is the way to win both the battle and the war during this global corona crisis. What is needed is courage and above all courage to prioritize. Those who defend everything in effect defend nothing. If every thing is a priority, then nothing becomes a priority. At the time of crisis, it’s not always easy to know if being brave and being right are the same thing. The line between bravery and foolishness can be thin and it’s often only with hindsight that we know which Courses of Action were, in the end, the correct ones. To judge hindsight we can use After Action Reviews (AARs).
Two/third of top management lacks the competency to manage successfully their companies through the ever changing external business environment. In additon they are not able to inspire and motivate their staff and employees. Over 80% of investors and analysts tell that leadership and vision are “leading” for their future investment strategies. Investors see leadership and vision as far more important than the financial performance during the past three years.
The statements above come from McKinsey in March 2017 writing about strategic planning. How come? People are overly confident and optimistic, and informed people are even more confident (1). No one was ever promoted for putting forward a plan whose growth forecasts didn’t sail upwards? (2). Executives constantly tell themselves that they need an ambitious vision to inspire great performance (3). But when the strategy outcome is not realized after the first year, attribution bias usually kicks in: one simply blames the circumstances or others, but never oneself.
Most management models lead unnecessary and enormous cost increases with a large chance of hugely disastrous decisions, because top managers are hardly ever corrected, according to Gary Hamel. We need decisions based on responsibility and not on company position. CEOs and boards of management show ‘Sun-King’ behavior with too much distance from the shop-floor, leading to wrong strategic decisions.
For decades, it has been difficult to climb the intelligence pyramid from data, information, and knowledge to intelligence towards courses of action. A second point is that most of us tend to stick to the short-term operational and tactical level, because most managers are not aware of the strategic direction of the company. Peter Drucker stated that strategy is the most difficult thing in business because it means making choices that differentiate us from the competition. A third aspect is that data and information management in most organizations is generally poor!! Why is this?
If you are dissatisfied with strategy-making based on information, backward-looking analysis, management controls and problem-solving after the event, but you would still like to make a positive contribution to thinking about the future, it is time for strategic intelligence.
Strategic intelligence enables top management to foresee the opportunities and threats in a timely fashion. At the end of the day who is accountable? Being agile as a company depends on developing two key capabilities: responsiveness and organizational flexibility. Many of us see new business opportunities. However, most of us are concerned that our companies lack the skills needed to meet future competitive threats.