The Crux

How to Deal with Disruption? The real challenge of “disruption” is not that you don’t see it coming. The real challenges are: (A)  that it costs more profit to respond than it seems to be worth (B)  that your organization lacks the necessary technical ability, financial strength, or organizational skills to respond (C)  that it is the destruction of the whole ecosystem in which you live

Track your monthly spending on groceries. A blip upward does not mean your finances are out of control, and a downward blip does not signal coming starvation.

But incentives go only so far. Einstein spent the declining years of his life trying to create a “unified field theory.” Would a $100 million bonus have sped the work to completion? If the problem is to win the war against the Nazis in Europe, would it have happened more quickly had Eisenhower been promised a $100 million bonus for an early win? Do the US Marines run toward rather than away from rifle fire because of promised bonuses? The problem is that the model assumes that incentives are all that matters.

His problem and your problem and the problem of senior corporate executives is that winning in business and football is a matter of subtle skill, not pressing buttons and winding cranks.

The secret to emulating Steve Jobs’s Apple is not in pushing beyond the limits of technology. It is providing a truly excellent design that people will want to pay for—not just the prettiness of the box, not just the simplicity of the interface, but the whole sense that a product or service is the best it can be, for the moment, at what it does.

At a stop-sign intersection, the cars on the through street have the priority. At an airport, the traffic controllers tell the pilots which aircraft has the priority. When we assign too many priorities, the concept loses its meaning. When senior leaders don’t create crisp priorities, they leave it to everyone else to fight it out on the ground.

In addition to the new guiding policy and specific actions, I tasked the group with making their key assumptions explicit. I explained: In devising this new direction, this strategy, you have made some key assumptions. That’s absolutely necessary—that is how creativity and imagination work. For instance, you are assuming that you can develop tailored nutrients for different soil conditions, crops, weather, and so on. You have made some progress in this area already, but you are assuming continuing success in development. It is important to write down these assumptions. When you meet as a foundry group again, whether in five or eleven months, you need to look at whether these assumptions were correct. I call this process “strategic navigation.” It is vital to be able to revise your actions when assumptions are not being borne out.

This foundry, I said, has agreed on a specific guiding policy and several specific actions. For this to be successful, each member of the foundry team will support and act to implement these policies and decisions. Each will ask the others for aid when it is necessary, and that aid will be given. This foundry recognizes that these choices are not forever—that things may change. But for the next eighteen months, it will support and hold this course. Agreed?

I ask the executives to imagine that we have a way to send a message to the company CEO’s laptop seven years ago. There is only one message. It has to be short and cannot contain any specific information about the future. The time police forbid such messages. What would you send?

I ask each participant to write down in one sentence their recommendation for action, not a vague strategy or a performance goal, but a focused action that has a good chance of being accomplished. They have two minutes to commit this to paper, fold it over, and dump it into a box

There is a sense in which strategy is almost always about some sort of focus. Absent a crisis or very competent strategic leadership, most organizations gradually defocus. They try to do fifty different good-sounding things and do none of them well. One of the most important functions of the Strategy Foundry is to focus energy and resources on adroitly resolving the most important challenges.

life, executives should take the time to write down the key assumptions underlying their strategy. The heart of moving from difficulty to action is making assumptions. Unfortunately, some of these may be wrong. Unless we commit to making them explicit, and checking their accuracy as events unfold, it becomes very hard to adapt. Strategic navigation is the process of making assumptions explicit and then checking them as events unfold.

Having more than three priorities stretches the meaning of the word!