Strategy & Organisational Change
5 READS YOU NEED...
F or all the was no mention of the author’s take on corporate strategy. This may seem a strange observation. After all, Roald Dahl was a beloved storyteller, not a business mogul. Why would anyone seeks his views on executive leadership? Yet many companies continue to follow an outdated approach to decision-making ripped straight from the pages of his 60-year-old children’s story. “You see, Charlie, not so very long ago there used to be thousands of people working in Mr. Willy Wonka’s factory. Then one day, all of a sudden, Mr. Wonka had to ask every single one of them to leave, to go home, never to come back.” “But why?” asked Charlie. “Because of spies. All the other chocolate makers had begun to grow jealous of the wonderful candies that Mr. Wonka was making, and they started sending in spies to steal his secret recipes. The spies took jobs in the Wonka factory, pretending they were ordinary workers, and each one found out exactly how a certain controversy and column inches about the recent attempt to update Charlie and the Chocolate Factory , there
To open up your strategy Julia Hautz, Kurt Matzler and Stephan Friedrich von den Eichen. This is our book opening up strategic initiatives to involve frontline employees, experts, suppliers, customers, entrepreneurs, and even competitors. And in case you are wondering whether it works: a survey of 200 business leaders shows that, although open- strategy techniques were deployed for only 30 per cent of their initiatives, those same initiatives generated 50 per cent of their revenues and profits. Open Strategy by Christian Stadler,
The Upside of Uncertainty: A Guide to Finding Possibility in the Unknown by Nathan Furr and Susannah
of this approach. Shareholders also prefer transparency to secrecy. A study of 900 public strategy presentations found that the average stock price rose by two per cent – or the equivalent of $1.1 billion in market value – on the day of the presentation. The positive effect was even stronger for new CEOs who announced their strategy within the first 100 days. Stock price rose by more than five per cent, which is the equivalent of $2.8 billion in market value. And for new CEOs from outside the industry, the upward bounce was 12 per cent, or $6.6 billion in market value. The message that researchers Richard Whittington, Basak Yakis-Douglas and Kwangwon Ahn revealed is clear. Markets don’t like secrecy. They want to understand your strategy. And if investors don’t think your strategy makes sense, your stock price will drop. The notion that strategy should remain a closely guarded secret has persisted for thousands of years and can be traced to its roots in ancient warfare. The Chinese general Sun Tzu, author of The Art of War , advised generals that: “By discovering the enemy’s dispositions and remaining invisible ourselves, we can keep our forces concentrated, while the enemy’s must be divided.” This is old strategy thinking. In today’s complex and interconnected world, a more collaborative approch is the best way to win the day.
special thing was made.” This fictional exchange was inspired by a genuine struggle for supremacy between the two biggest firms in British confectionary, Cadbury and Rowntree’s. In an attempt to gain a competitive edge, both firms sent employees to work for the other. These undercover confectioners had one job – to steal their rival’s closely guarded secrets. That obsession with secrecy persists today. Executives waste time worrying that their competitors will learn of their plans. In reality, a strategy is more likely to fail because too few people understand it, not too many. A survey of 8,000 managers from 250 companies found that only half of the C-suite have a clear idea how the firm’s priorities fit together. That dropped to a third for their direct reports. On the frontline, just 16 per cent of supervisors and team leaders were able to identify the firm’s strategic priorities. If your own people don’t understand your strategy, there is no point worrying about your rivals learning your plans. The real threat is that your strategy will fail because it has been botched by members of your own organisation who don’t know how to execute it. Another key challenge is
co-ordination. To implement a big, new initiative, different divisions need to work together. But, according to the same survey, just nine per cent of managers believe they can always rely on other functions and units within the business. “A strategy is more likely to fail because too few people understand it, not too many” The best way to overcome this is a deliberate effort to work on strategic initiatives across departments. A strategy shrouded in secrecy is hardly conducive to this. The obvious solution is to adopt a more open approach to making and sharing strategy. Steelcase, the world’s largest office furniture manufacturer, is a case in point. The company held an online jam to galvanise its 13,000 employees around its new strategy instead of using the usual top-down communication plan favoured by most firms. The 36-hour event in 2017 allowed employees to explore strategy simultaneously. This type of engagement creates personal ownership, as staff can figure out exactly what is relevant for them. They can also make connections with colleagues across the business and overcome the silo mentality that can frequently hinder a strategy. Transparency and inclusion, not secrecy, lie at the heart
Harmon Furr. We are all hard- wired to hate uncertainty, but the authors encourage us to look at the other side of the coin. They guide us from fearing and avoiding uncertainty to embracing it as the origin of possibility. It’s a natural companion of all those who want to leverage open strategy, as openness requires you to embrace uncertainty. Economics of Artificial Intelligence by Ajay Agrawal, Joshua Gans and Avi Goldfarb. This one is not on open strategy but, nonetheless, I have to include it. How do we need to design products and services to make the most of AI? Fundamentally, they argue that the opportunity of AI lies in the decoupling of prediction from decision-making. Power and Prediction: The Disruptive
Streets of Gold: America's Untold Story of Immigrant Success by Ran Abramitzky and Leah Boustan. It may
“The Power of Anomaly” by
Martin Reeves, Bob Goodson, and Kevin Whitaker. This is one of my favourite
be controversial, but most western economies need more immigration. Abramitzky and Boustan use the power of machine learning to sift through millions of immigrant stories and provide a comprehensive picture – a bit like researching everyone’s family history. How does this link to open strategy? Immigrants bring fresh ideas, which is what you are seeking when involving more stakeholders in strategy-making.
recent Harvard Business Review
articles. It’s about identifying the next big thing. Why not do a bit of trend analysis? Don’t! By the time a trend is obvious, it is yesterday’s news. The key is to look at the edges, at small anomalies you can spot, e.g. from customer interactions. And you won’t be surprised that I think open strategy fits well with this.
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