This post was originally written by author John Wells for his own blog. Wells is Professor of Management Practice at Harvard Business School – his latest book, Strategic IQ: Creating Smarter Corporations, helps business leaders overcome the inertia that can prove deadly for their firms’ success.
What does it mean to have low strategic IQ? Failure to respond to the need for strategic change is the measure of its effects, but it doesn’t explain the causes or the symptoms. And there are many.
The Strategically Blind
Some firms are strategically blind – they cannot actually see the need for change. For some this is because they have no idea what strategy is – they are blissfully ignorant. It may come as a surprise to some that firms can be successful without a strategy, but it is quite common; without competition, is often possible to do well; it is only when competitors appear that a good competitive strategy is required.
Others are simply playing let’s pretend, using the jargon and fooling themselves that they have a competitive advantage such as lower cost or differentiation when they don’t really know what the terms really mean and have no way of measuring the advantage they claim. Then there are those who have succumbed to a bout of strategic amnesia – they once had a strategy but have forgotten it so they are now simply repeating what they did in the past without really knowing why.
Often, firms have plenty of evidence of strategic problems but simply deny it. Ostriches stick their head in the sand and pretend it’s not there. Rather than accept the data might be right, they find countless reasons for why it is wrong. Bunnies in the headlights worry frantically about the oncoming competition but fail to do anything to get out of the way. Meanwhile, there are those who simply try harder, like hamsters on a treadmill, running hard on a road to nowhere; cutting overhead and reorganizing to improve short term performance, doing the wrong thing more efficiently, distracting themselves from addressing the long term strategic problems.
Finally, there are firms that accept that they have a strategic problem but simply don’t know how to solve it. They try a-little bit-of-everything in the hope that something will stick. They often squabble about what the real problem is, or the best way of solving it. Or they outsource to consultants, pass responsibility over to someone else without ever really understanding how to do it for themselves. And because the world is always changing, it is not too long before they must call the advisors back. The result is dependence rather than competence. In effect, it has outsourced its critical decisions on where and how to compete, abdicating one of the key responsibilities of the top management team.
Is your firm showing signs of low strategic IQ?