Open Strategy: Overcoming distractions from outside the C-Suite
By Christian Stadler, Julia Houtz, Kurt Matzler, and Stefan Friedrich von den Aichen (MIT Press, 2021)
In July 2019, Telefonica chair and CEO Jose Maria Alvarez-Pallet asked his 115,000 employees a simple question: What do you do to improve the company? The answer was loud and clear: develop a new strategy. Four months later, he was forced to start the biggest change in the company’s history. সম্পূর্ণlvarez-Pallete broadcasts the firm’s full “Executive Summit” live, inviting all employees, comments and feedback. The engagement continues on a scale — with 11.5 million posts, comments and responses from employees on its digital platform that year. He also joins, hinting at his promise. It was more than a one-time exercise in seeking input.
Professor Christian Stadler (University of Warwick), Julia Houtz (University of Innsbruck), Kurt Matzler (University of Innsbruck) said that opening up the strategy process thus leads to better ideas, more realistic planning and more effective implementation than traditional, closed methods. ), And Stefan Friedrich von den Aichen (University of Bremen) in their concise and eloquent book, Open strategy. It takes a lot of courage and skill to pull it off.
Traditionally, a small set of executives created a strategy behind closed doors, then broadcast it to the company. Inviting others to contribute to leaders is often seen as a sign of weakness, which diminishes the dignity, authority and control of leaders. However, the reality is that leaders often find it difficult to develop their own imaginative ideas, they are bound by their conventional wisdom and team thinking. Encouraging their employees to sign up for a newly developed strategy is still difficult, given that they have not commented on how the strategy should be implemented. So it’s no surprise that 50% to 90% of strategies fail (including well-known examples from giant companies like Nokia, GE and Daimler). The authors boldly argue that the wrong strategic framework, lack of intelligence or lack of openness is a bigger barrier to success than weak mentors.
Open strategy is more than a set of strategies or changes to existing strategies. It requires leaders to believe that the strategy can be more distinctive and effective if more people are involved. Open leaders show weakness by acknowledging what they do not know. They respond with “yes,” and “mentally unfamiliar ideas”:YesThat’s a great idea, And In order for this to work in our company, we have to do X. “
Frontline employees, who are close to the needs and concerns of the customers, should be given a prominent platform where their ideas can be shared. Barclays Retail Bank has adopted this approach because it has fine-tuned its strategic planning. Outsiders বিশেষ especially individuals in other industries সাহায্য can help mitigate the effects of cognitive bias that impedes the ability of insiders to detect early signs of emerging trends, unless those outsiders are sufficiently vocal and abundant and sponsored. Outsiders also address the lack of cross-fertilization of concepts in large organizations, a problem that plagued Microsoft when it tried to compete with the iPhone and BP when the technical team contributed to poor communication between monitoring and operational teams in BP’s deepwater horizon. For the catastrophic oil spill of 2010.
But you should not confuse an open strategy process with free for all. “To make the open strategy better, you can’t just jump into it,” the author writes. There are important subtleties to when, how, and by what means the process should be opened. In the early stages, hire digital platforms to crowdsource করে using competition and “jams” ধারণা as many ideas as possible. In 2007, Cisco Systems launched the I-Prize, a global competition to help the company build its next billion-dollar business; Out of 2,500 external deposits, it awarded a US $ 250,000 to a German company that suggested a sensor-capable smart electric grid using Cisco’s IP technology.
Your open strategy process should not be confused with free for everyone.
Personally form a small team when you go to the next step in formulating the strategy. This makes it easier for participants to share more information, search in more detail, and discuss nonverbal cues. Reopen the process for implementation উদাহরণ for example, through the community যখন when you will need accused people to work to get you involved in the design. Avoid playing it safely: “When you are faced with a complex or fancy strategic challenge, when best practices do not exist and when you do not know what kind of skills or abilities you will need, try to enter a competition,” the authors advise. .
The goal is not democracy. Leaders need to work forcefully and sometimes unilaterally to create strategic questions. In the case of Saxonia Systems, a German software company, this means asking people, “Where do we want to go and how do we get there?” Leaders then have to choose who to involve, establish recruitment rules and incentives, select platforms for participation, and ultimately make decisions. Transparency Fundamentals: Employees need to understand how their contributions have been evaluated and implemented; Otherwise, their participation is considered a strategy “theater”.
Openness should not be confused with sharing confidential information. Even Bridgewater Associates, a U.S. investment management company known for its radical transparency, owns some information and is extremely limited. The same goes for the military. The U.S. Navy has invited contributions to a number of questions, including the need to share sensitive operational details, such as: What new resources could turn the tide in the Somali pirate situation? Or: What new risks could arise that could transform the Somali pirate situation?
The authors set the method with such granularity and clarity that it became effective immediately. The visuals are great, enlivening ideas and structures. The two authors, Matzler and Von Dan Aichen, are partners in IMP Consulting, which runs a program called the Nightmare Competitor Challenge. This is especially effective in helping organizations think in detail about disruptors before deciding whether to fight them or unite. The scope and depth of the case study demonstrates the effectiveness of the science-method in business (especially to complement the more well-known U.S. example from German-speaking countries), in the military field, and from the present day and history.
When your organization relies on other participants in the ecosystem (as an orchestrator, partner or complement) there is more to say about strategy development and implementation. Nonetheless, it is a must-read strategy book for any executive, investor, consultant or academic looking for a new, dynamic, and inclusive approach to strategy in a world of complexity and uncertainty.
With a diagnostic, the authors have raised seven questions to test your openness before you start – my favorite one is “Do you like Miles Davis or Johann Sebastian Bach?” (If you prefer improvisation, you are more likely to be ready for an open strategy.) They recommend opening slowly, identifying which businesses are most at risk of disruption, and advising broadening of external voices.
Since leaders want to refresh their organization’s strategy to compete in a changing world, sticking with what they know and who they know may seem like a safe bet. But when they face the threat of disruption, they should take bold steps to open up the strategy process. They may simply find staff members and outsiders willing, able, and willing to help develop plans that are “newer, more innovative, more informative, and easier to implement” than what they get through the traditional process.
Better, simpler strategy: a value-based guide to exceptional performance
By Felix Oberholzer-G (Harvard Business Review Press, 2021)
The book defends its title by placing the strategy on a pretty simple basis: winning companies increase the willingness of customers to pay (for products and services) and reduce the willingness of employees and suppliers to sell (their services organization). The distance between the two is the length of the “value stick”. Oberholzer-Gee demonstrates the power of this tool to describe the strategies of various companies, including Best Buy, Michelin and Uber.
Love as a business strategy: resilience, engagement and success
Mohammed F. Anwar, Frank E. Danna, Jeffrey F. Mother, and by Christopher J. Petre (Lioncrest Publishing, 2021)
Many companies support a man-first strategy. Rarely do they run well. Less tap on the power of love. The authors use Software Transformation, a human resource consulting business where they operate, to describe how true empowerment and human culture can be created. The stories are authentic and clear, which makes this book more accessible and action-oriented than many others.
- David Lancefield A strategist and trainer who has mentored more than 35 CEOs and led 15 digital conversions. He is the contributing editor Strategy+BusinessAnd he hosts the interview series Lancefield on the line And publishes newsletters Flash + Sparks.