When was the last time your organization paused and took a look at the roadmap ahead - the big picture? Last round of strategy planning?
Now answer this instead:
When was the last time you took that big picture, trashed it and then re-designed the whole thing?
Shifts in customer demand and buying preferences is what is killing traditional businesses, and companies and execs all around are walking into this trap their eyes wide shut, refusing to see the implications in plain view, full well knowing they should change course but unable to do so. Why?
Organizations are being held hostage by their own legacy. In fact, entire industries are suffering from their own conventions and best practices. We so easily fall into the trap of "this is how it has always been done" that breaking free seems mission impossible. Either that or we get so consumed by our on-going initiatives and driving them to completion that we become blinded to changing realities outside our immediate vicinity.
There are couple of things that help us understand this better.
Psychology. It is our innate habit to seek security. Familiarity fosters security. We take always the same route to work, we use the same stores, we buy the same car brand. I argue that a big part of brand loyalty is actually thanks to ease of effort and our reluctance to add switching costs, whether emotional or real ones.
Doing things same way they have always been done is easier and takes less effort since we are already familiar with the process. We build mental models of patterns based on our previous experiences and consistently look for something to reinforce that pattern. In psychology this is called the consistency trap. Anything outside familiar is deemed unnatural, downright dangerous, thanks to our human wiring.
"We refuse to see something in plain view because of preconceived notions of what this something should look like."
Organizational design. Building a successful business and designing strategy is also built on a pattern. We select industry, strategic segments, customer groups, product / service categories, timelines, pricing etc. and aim to be best on those focus areas we have selected. Initially, it seems like a good idea and for a while it actually works. But eventually the structures we have built, best practices we have learnt, processes we have implemented for increased productivity and efficiency, turn into a cage.
Things that once made us great, are now things that hold us back.
How many times have you used the term thinking outside of the box? I know I have, probably few times too many. I have met dozens and dozens or brilliant, outside-of-the-box thinkers in my life. It is not that we don't have the capability to think fresh, think new. It is what is inside the box that kills our innovation capability. Structure, processes, rules, annual budget cycles (?!)
What you hammer down in print as your organizational budget somewhere around November this year is what will keep your hands tied for the next 12 months. Without any slack or flexibility to respond to emerging opportunities you are creating a huge constraint on responsiveness and innovation. I think ex-Head of Intel Andy Grove described this well in saying that designing organizations is always a balancing act to get the best combination of responsiveness and leverage.
Here comes the punch line.
These structures or boundaries we have drawn, they define things the way they are today. They do not define the way how things should be tomorrow.
Everything we have created by ourselves, we also have the possibility to change. This is why I truly believe that organizations are only as strong as their capability to learn.
Here's my invitation for you to learn with me.
This fall is all about #innovation, and in this six-part article series I will walk you through both psychological and organizational innovation constraints and show how organizations can break free from these restricting patterns, and how we can design our organizations and innovation strategy better to build companies geared to build better outcomes and experiences for their customers.