Strategic Myopia

This definition works both at the level of the firm and at the level of the individualWhat will the future look likeHow will the marketplace change with evolving customer needs and expectationsWho will the competition be not just now but in the futureRelative to these future needs and competitors what advantage will we or our firms provideIt is simple way to understand and apply strategy Here is the process laid out on one page on how every firm and individual can apply strategy including some key questions and approaches StrategyBut so many get strategy wrongIn a piece called Four Strategic Mistakes one set of these mistakes are discussedThese areMistake 1 Strategies that limit oneamp8217s competitive set or category definition by the companies one currently competes with Many key opportunities and threats come from outside the way we currently define a competitive set or our categoriesMistake 2 Strategies built by extrapolating todayamp8217s realities into tomorrow Like scale matters or population will keep growing or interest rates will always remain lowMistake 3 Strategies focused on technology trends Today it is AI AI AIMistake 4 Strategies that do not incorporate talent dynamics People will eat strategy for breakfast lunch and dinnerMore details on these mistakes and how to fix or avoid them are here Four Strategic MistakesThere is however one overwhelming reason that so many companies and individuals really make a mess of strategyStrategic MyopiaStrategic myopia is some combination of shortsightedness longsightedness or being blind to realityBlind to Reality How many times have we all had experiences where our firms or our customers seem to exist in a fairy land disengaged from realityNobody calls out the turd on the table because either we do not want to acknowledge the pain that we are on the wrong track or somebody is terrifying or being terrified Everyone pretends that the brown moist thing in the middle of the table is a brownie when it is a piece of wasteThe problem will solve itself The issue will dissolve It is just a shortterm hiccupBut we all know that the issue is real but to confront it means taking on challenges that will be hard to resolve includinga we no longer have relevant products or services AOL as the Internet became more popularb our marketplace has changed with competitors who have different economics any traditional media companyampgtc our leaders and even ourselves have outdated skill sets and mindsets Therefore unless we learn new things and unlearn old things we are growing irrelevant too many senior people especially those who use fear and power to ruleEvery one of us want to look away and hope we do not have to deal with the challenges The smart companies and leaders twist themselves into new shapes realizing that transformation is about peopleShortsightedness This is a focus on the short term Results must be delivered this quarter or this year Either because the urgent crowds out the important or there are misaligned incentives or short tenures or a focus on the scoreboard of a stock price even though in reality markets punish companies for not preparing for the futureToo many executives align the way they allocate their time with the way they allocate their budgets Most companies allocate 90 or 95 of their budget on the coming year but that does not mean senior executives should allocate their time that way The smart ones allocate a quarter of their time to tomorrow delegating some parts of managing today to their teams The future cannot be delegated to an innovation group or a futures group both of which may be important as focal points but needs a lot of time and commitment of senior management since only they have the expertise to make hard calls see the patterns and most importantly by doing so signal to the company that the future is importantLongsightedness A form of myopia is longsightedness which is not being able to see things clearly that are nearWe all have heard the refrains of amp8220this will not happen till I retireamp8221 or amp8220this will happen many years from now so we will worry about it lateramp8221 only to realize later that 1 change often scales exponentially and what looks like a gradual slope suddenly goes vertical and 2 it takes time for organizations to change often years and so waiting is not a form of maximizing strategic options but kicking the ball down the roadCompanies and individuals who wait limit the ability to a be an early mover and gain competitive advantage with partnerships or pricing and b limit the downsides of making mistakes before something has scaled and can truly hurt the organizationCorrective LensesThe good news is that strategic myopia can be correctedHere are some ways that do not allocate huge budgets or organizational redesignsa Annual ReThink Once a year senior executives should challenge the key assumptions of their strategy Three key questions to ask areAre our customers adding new types of firms or going to other firms for new capabilitiesWhat are our key competitive advantages that we believe we have and are they truly advantages today or are they anchors that hold us backIf we were to start our company today with all our assets and no constraints except law and science given everything we know what would our company look likeYou will be surprised how different the future may look after these exercisesb Look outside for inspiration and cautionary tales Most companies are too focused on their categories and competitors and therefore get defensive if someone says they do not get it or miss that the challenge is not from their existing competitive set By asking external partners going on roadtrips and attending conferences to learn with a focus on the following questionsWhat are examples of companies that reinvented themselves and created great economic value Dominoamp8217s Pizza Microsoft Abercrombie and Fitch New York Times and what can we learn from themWhat companies tried to reinvent themselves and failed and whyWhat companies failed to change and dwindled away many newspapers and other print media companies BlackberryGreat strategies are often only seen at a distance away from oneamp8217s category just like great architecture can only be often appreciated from a distanceStrategy will grow more and more important as the rate of change and transformation speeds upTo thrive one must understand strategy avoid common mistakes and most importantly not be myopicPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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