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jerryking : peripheral_vision   2

The path to enlightenment and profit starts inside the office
(Feb. 2, 2016): The Financial Times | John Thornhill.

Competition used to be easy. That is in theory, if not always in practice. Until recently, most competent companies had a clear idea of who their rivals were, how to compete and on what field to fight.

One of the starkest - and scariest - declarations of competitive intent came from Komatsu, the Japanese construction equipment manufacturer, in the 1970s. As employees trooped into work they would walk over doormats exhorting: "Kill Caterpillar!". Companies benchmarked their operations and market share against their competitors to see where they stood.

But that strategic clarity has blurred in so many industries today to the point of near-invisibility thanks to the digital revolution and globalisation. Flying blind, companies seem happier to cut costs and buy back their shares than to invest purposefully for the future. Take the European telecommunications sector. Not long ago most telecoms companies were national monopolies with little, or no, competition. Today, it is hard to predict where the next threat is going to erupt.

WhatsApp, the California-based messaging service, was founded in 2009 and only registered in most companies' consciousness when it was acquired by Facebook for more than $19bn in 2014. Yet in its short life WhatsApp has taken huge bites out of the lucrative text messaging markets. Today, WhatsApp has close to 1bn users sending 30bn messages a day. The global SMS text messaging market is just 20bn a day.

Car manufacturers are rapidly wising up to the threat posed by new generation tech firms, such as Tesla, Google and Uber, all intent on developing "apps on wheels". Chinese and Indian companies, little heard of a few years ago, are bouncing out of their own markets to emerge as bold global competitors.

As the driving force of capitalism , competition gives companies a purpose, a mission and a sense of direction. But how can companies compete in such a shape-shifting environment? There are perhaps two (partial) answers.

The first is to do everything to understand the technological changes that are transforming the world, to identify the threats and opportunities early.

Gavin Patterson , chief executive of BT, the British telecoms group, says one of the functions of corporate leaders is to scan the horizon as never before. "As a CEO you have to be on the bridge looking outwards, looking for signs that something is happening, trying to anticipate it before it becomes a danger."

To that end, BT has opened innovation "scouting teams" in Silicon Valley and Israel, and tech partnerships with universities in China, the US, Abu Dhabi, India and the UK.

But even if you foresee the danger, it does not mean you can deal with it. After all, Kodak invented the first digital camera but failed to exploit the technology. The incentive structures of many companies are to minimise risk rather than maximise opportunity. Innovation is often a young company's game.

The second answer is that companies must look as intensively inwards as they do outwards (e.g. opposing actions). Well-managed companies enjoy many advantages: strong brands, masses of consumer data, valuable historic data sets, networks of smart people and easy access to capital. But what is often lacking is the ambition that marks out the new tech companies, their ability to innovate rapidly and their extraordinary connection with consumers. In that sense, the main competition of so many established companies lies within their own organisations.

Larry Page, co-founder of Google, constantly urges his employees to keep being radical. In his Founders' Letter of 2013, he warned that companies tend to grow comfortable doing what they have always done and only ever make incremental change. "This . . . leads to irrelevance over time," he wrote.

Google operates a 70/20/10 rule where employees are encouraged to spend 70 per cent of their time on their core business, 20 per cent on working with another team and 10 per cent on moonshots. How many traditional companies focus so much on radical ventures?

Vishal Sikka, chief executive of the Indian IT group Infosys, says that internal constraints can often be far more damaging than external threats. "The traditional definition of competition is irrelevant. We are increasingly competing against ourselves," he says.

Quoting Siddhartha by the German writer Hermann Hesse, Mr Sikka argues that companies remain the masters of their own salvation whatever the market pressures: "Knowledge can be communicated. Wisdom cannot." He adds: "Every company has to find its own unique wisdom." [This wisdom reference is reminiscent of Paul Graham's advice to do things that don't scale].

john.thornhill@ft.com
ambitions  brands  breakthroughs  BT  bureaucracies  competition  complacency  constraints  Fortune_500  incentives  incrementalism  Infosys  innovation  introspection  irrelevance  large_companies  LBMA  messaging  mission-driven  Mondelez  moonshots  opposing_actions  organizational_culture  outward_looking  Paul_Graham  peripheral_vision  radical  risk-avoidance  scouting  smart_people  start_ups  staying_hungry  tacit_knowledge  technological_change  threats  uniqueness  unscalability  weaknesses  WhatsApp  wisdom  digital_cameras  digital_revolution  historical_data 
april 2016 by jerryking
The 6 Habits of True Strategic Thinkers
Mar 20, 2012 | | Inc.com | Paul J. H. Schoemaker.
Adaptive strategic leaders--the kind who thrive in today’s uncertain environment--do six things well:

1. Anticipate. Hone your “peripheral vision.” Reduce vulnerabilities to rivals who detect and act on ambiguous signals. ... Build wide external networks to help you scan the horizon better
2. Think Critically. Critical thinkers question everything. To master this skill, you must force yourself to reframe problems to get to the bottom of things, in terms of root causes. Challenge current beliefs and mindsets, including your own Uncover hypocrisy, manipulation, and bias in organizational decisions.
3. Interpret. Ambiguity is unsettling. Faced with it, you are tempted to reach for a fast (potentially wrongheaded) solution. A good strategic leader holds steady, synthesizing information from many sources before developing a viewpoint. To get good at this, you have to:Seek patterns in multiple sources of data; Question prevailing assumptions and test multiple hypotheses simultaneously.
4. Decide. Many leaders fall prey to “analysis paralysis.” Develop processes and enforce them, so that you arrive at a “good enough” position. To do that well, you have to: Carefully frame the decision to get to the crux of the matter, Balance speed, rigor, quality, and agility. Leave perfection to higher powers. Take a stand even with incomplete information and amid diverse views
5. Align. Consensus is rare. Foster open dialogue, build trust, and engage key stakeholders, especially when views diverge. To pull that off, you need to: Understand what drives other people's agendas, including what remains hidden. Bring tough issues to the surface, even when it's uncomfortable
Assess risk tolerance and follow through to build the necessary support
6. Learn.

As your company grows, honest feedback is harder and harder to come by. You have to do what you can to keep it coming.
Encourage and exemplify honest, rigorous debriefs to extract lessons
Shift course quickly if you realize you're off track
Celebrate both successes and (well-intentioned) failures that provide insight
Do you have what it takes?
tips  leadership  habits  strategic_thinking  anticipating  critical_thinking  networks  biases  conventional_wisdom  decision_making  empathy  feedback  thinking  failure  lessons_learned  leaders  interpretation  ambiguities  root_cause  insights  paralyze  peripheral_vision  analysis_paralysis  reframing  course_correction  vulnerabilities  good_enough  debriefs  post-mortems  problem_framing  discomforts  wide-framing  outward_looking  assumptions  game_changers 
march 2012 by jerryking

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