The Hidden Dangers of Strategic Success

Over the past several weeks, I have had the privilege of working with very successful business leaders at very successful, established organizations as part of my work developing Business Acumen skills.  Business Acumen is a critical competency in today’s volatile, uncertain, complex, and ambiguous business world.  In every Business Acumen training workshop that I have conducted so far this year, we utilize sophisticated business simulation to develop and practice new skills.  As part of our debrief and review process, we analyze the data from the simulation exercises to identify trends for research, make our simulations better, and help our clients notice tendencies in behaviors that could lead to the addition of further skill development.

In reviewing the analytics from workshops delivered in 2017, I have noticed a statically relevant and interesting trend:

Established leaders at established companies spend more time focusing on sustainability of established brands than they do focusing on enhancing the value proposition of what got them to a leadership position in the first place.

In one of our core business simulation platforms, AGES™, participants take over a portfolio of established and new products.  They are able to choose a new value proposition to customers that creates differentiation and enables their simulated organizations to achieve various metrics of success.  More than 85% of the time, established leaders in established companies with established products continued to invest in Marketing, Sales, and service to support market share instead of investing in innovation and R&D to either launch new versions of existing products or bring new and enhanced products to market.

Think of it this way; instead of Apple launching the iPhone 2, 3, 4, 5, 6, and 7, they decided to stick with the iPhone 1 and try to convince customers of smartphones that the iPhone 1 was the best in the market through tons of marketing and salesmanship.

Now here’s where it gets interesting.  I then went back and took a look at the data from new leaders working in newer companies with newer products.  The result was almost the exact opposite.  They invested heavily in upgrading and launching new products and used marketing investment to create awareness, not just sustainability of the brand.  In some cases I can share that their decision making bordered on recklessness as they were bringing new products to market faster than their customers could absorb, but they were true to their strategy and focus.

So essentially, if you are an established leader at an established company with established products, you need some “strategy awareness” to make sure you aren’t becoming complacent.

Here are 3 key learnings for Business Acumen application:

Don’t forget your value proposition to your customers; being defensive will hurt you

No matter if you are the low cost play, the customer focus play, or the innovation play executing the right strategy to the right customer segment helped you achieve success.  Don’t stop and don’t forget what got you there.  Becoming defensive and trying to sustain share on yesterday’s value proposition will hurt you in the long run and possibly put you out of business.

Benchmark your competition and determine if they are being defensive or proactive

You have other competitors in your market and they also have a value proposition they are fighting to deliver against you.  Establish regular benchmark intervals to see how they are doing and the degree to which they are focusing on sustaining their brand vs. growing their brand.  In either case, it is a signal to you and your strategy on what to do.

Listen to your customers, they will tell you what to do

All too often large, established companies stop listening to their customers because they have all of the answers. Don’t let that be you.  If you are stuck between sustaining your brand and growing it, ask your customers because in this case, they will have the best answers.

Business Leadership is a competency that everyone in business needs to practice and develop every day in order to be successful.  According to HR talent development guru Josh Bersin, the “overwhelmed” worker will have almost no time for development; not even an hour a week.  Which means without training, development, and practice of skills leaders will rely on luck and hope for success.  I guarantee you Tom Brady and the rest of the Super Bowl winning Patriots practice for more than one hour a week!

For many years, I have described business leadership as equal to the process of executing your business strategy to make a profit and create shareholder value through people.

As business leaders, we need to provide our teams and employees with the skills, practice, tools, and reasons to be successful and feel engaged and committed.  As I have learned over the years by conducting award-winning business leadership learning engagements, employees feeling engaged comes down to very basic elements including feeling good about their work and feeling good about how their work gets done.  In other words, a pride of purpose in the workplace.

Too many business leaders struggle with getting their direct reports to feel pride in their company, their work, and their purpose.  The business leadership challenge becomes how to change the game, the mindset, and most importantly the actions of employees who aren’t necessarily “dis-engaged,” but certainly aren’t feeling and exhibiting tremendous pride.

In 2017 and beyond – where we have at least 4 generation still in the workforce - creating and leading an environment where everyone feels great pride and does whatever it takes to get the job done is very hard, but it can be done.

Based on some recent research that we conducted as part of the overall design for the creation and launch of our new Fundamentals of Business Leadership Simulation. Here are 3 examples of effective leadership skills that will help to develop an environment of pride in the work and on the team:

1) Be clear about expectations

Most companies do a fair job defining tasks and setting rewards for achievements of goals and objectives but too often fall short in terms of setting specific roles and responsibilities.  As we still recover from the financial meltdown of 2008, many jobs went away and too many employees are doing at least two jobs which makes things even fuzzier.  When this occurs, things fall through the cracks because employees don’t know what to do and they haven’t been provided the skills and tools to be successful.  Great business leaders make sre that their people know their jobs, objectives, and key results (OKRs).  In addition, employees with pride will pitch in and find new innovative solutions and help move the entire team forward.

2) Do everything possible to share their system of business

A business is a system of integrated dynamic parts. Sometimes these parts move well together and many times they do not.  The job of a business leader is to share how the system works and the role each employee plays in making the system work.  Having Business Acumen 101 skills is a start to the process but leaders have to go out of their way and make it a regular routine to share the big picture in terms of strategy, metrics of performance, and expectations.

3) Create an environment of pride by acknowledging success

An organization’s vision statement and value proposition to customers is the start but a business leader’s job is to bring them alive and make them happen.  Acknowledging and sharing success is a critical function of the creation of an environment that has significant pride.  And I don’t mean “pizza Fridays.”  I mean taking the time to acknowledge people for their work, customers for their partnership, and the achievement of specific goals and objectives in deep and meaningful ways.  But be careful!  Not everyone likes the same sort of recognition and one of your key jobs as a business leader is to match the right “acknowledgement strategy” with the right personality style of the person you are acknowledging.

Earlier this week I received an email from a past participant of a senior leadership development program I ran for his company a few years ago.  The subject of the email read: “Confidential – Idea for
your Blog.”  As I am always looking for new and interesting material, I opened it right away.