The reinvention of daily life means marching off the edge of our maps.
Bob Black
The Idea: To quote strategist, professor and author Rita Gunther McGrath, “competitive advantage is transient.” Our current advantages are not sustainable. Brand loyalty is at an all-time low, and no one is insulated from competition for very long. All of us must learn to hold our business assumptions, philosophies and advantages with an open hand. By doing so, companies birth new ideas; by not, there is a stall, and a lack of originality.
According to the Conference Board, “20% of public companies experience a growth stall – losing half of their market capitalization due to poor strategic decisions.” They start losing their consumer; their differentiation fades and they become replaceable. According to Fred Reicheld of Bain Consulting, the average U.S. Company loses 50% of their customers every 5 years, a defection rate of 10-30% per year. Plain and simple, most companies at some point will lose their advantage.
Organizations hold on to their ideas too long, lose their way, their identity and often the trust of their teams. This is true of leaders as well. What are you holding on to too tightly?
I want to share some ideas on why organizations & leaders fail, and the behavior behind the failures. Let’s better understand the warning signs.
Sydney Finkelstein in his book “Why Smart Executives Fail: And What You Can Learn from Their Mistakes” reminds us that business failure is driven by certain behaviors:
- A Flawed executive mind-set that distorts everyone’s view of reality
- Breakdowns in communications and trust
- Insecure leadership hindering course correction
Essentially, falls are driven by arrogance and complacency, by not understanding new competitors and a culture that doesn’t encourage internal dissent or creative tension. So how do you improve your awareness of threats and attacks?
Three questions must be asked at every off-site meeting:
- What do we not understand? (The known unknowns)
- What do we think we understand – but we don’t? (Our blind spots)
- What are the things we do not know we don’t know? (The unknown unknowns)
Dartmouth business professor Sydney Finkelstein argues that the most adept leaders; the ones that transform their employees into stars, possess five attributes. These leadership traits include fearlessness, competitiveness, curiosity, and the highest integrity and authenticity.
They also have an “outward focus” which allows them to assess the changing landscape and competition allowing them the freedom to create original ideas.
Harvard professor Adam Grant puts it this way. In his new book Originals, he characterizes special leaders as independent “original” thinkers. They are non-conforming because they practice brutal honesty, embrace risk, and nurture a culture of unleashing originality in others.
What are the common threads? Courage, honestly, always assessing and encouraging others to take a leadership role.
Are you watching the wrong competitors, and are you reassessing your business and your competitive assumptions?
Are you strong enough to question your own behaviors, listening to all the voices on your team not just the ones that support you?
Who helps you see yourself?
“It is good to see ourselves as others see us. Try as we may, we are never
able to know ourselves fully as we are.”
― Mahatma Gandhi
