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Brain circuits

Is your company strategically rigid?

Published 11 March 2022 in Brain circuits • 3 min read

In a VUCA world, it is more important than ever to renew your competitive advantage as often as necessary and to be prepared for uncertainty. Yet many companies, even those that have been successful in the past, can’t make this happen. If you feel that your organization may be in this group of rigid companies, ask yourself a few questions to clarify the situation.

Have you fallen into a success trap?

Companies who experience success often shift, even unintentionally, from playing to win to playing not to lose. If your focus is squarely on protecting your core business, you can’t move ideas forward that will help you leap to the next big change.

How do you distribute your resources?

Sometimes CEOs spread budgets around evenly to keep competing teams within the organization happy. The goal is usually to create a sense of equity rather than cause frustrations and tensions among various divisions. Unfortunately, this often results in resources being so thinly distributed that it is difficult to make an impact or a leap forward.

Is your leadership focused inward on their own careers?

Executives in companies push their own agenda rather than having common goals. They are thinking about career succession and impressing the board rather than developing the company.

Is your leadership convinced they have all the solutions?

This can also be a red flag. You must acknowledge you can’t be right about everything, and that unexpected circumstances will arise. This is often related to ego. We think we have the best ideas, or that our particular projects are the best, and we want more money for our projects regardless of whether they will prepare the company for the future or for uncertainty.

Is there too much homogeneity on your teams?

Members of many top teams often come from the same business schools or have the same socioeconomic backgrounds – that will stifle innovation. You need differences on the team to make it more likely that someone produces an outlier idea that can push the company forward. What makes you successful now may not make you successful tomorrow, especially in a VUCA environment.

 

Companies that fall into these traps will move incrementally through very small steps. The problem is the environment, as we know, can start changing at a more rapid pace so a gap begins to grow. The gap can quickly become so wide you need to make a giant leap, or die. This why companies who fail to master the capabilities for strategic agility often don’t have a long lifespan.

Authors

Stéphane J.G Girod

Stéphane J. G. Girod

Professor of Strategy and Organizational Innovation

Stéphane J.G. Girod is Professor of Strategy and Organizational Innovation at IMD. His research, teaching and consulting interests center around agility at the strategy, organizational and leadership levels in response to disruption. At IMD, he is also Program Director of Reinventing Luxury Lab and Program Co-Director of Digital Execution. 

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