November 2019 | Reading List
Kodak and digital cameras, Nokia and the smartphone, Sears and online retailing: the pages of business history are crowded with examples of companies that missed the boat. With unprecedented levels of change and uncertainty it’s even easier to miss warning signals, making vigilance a critical leadership capability.
In See Sooner, Act Faster, Wharton marketing professor George Day and founder of Decision Strategies International, Inc. Paul Schoemaker identify the key skills and practices of vigilant organizations and their leaders. They draw on a wide range of examples, including some spectacular successes (Charles Schwab recognizing the “robo-advisor” as the industry disrupter it would become) and cautionary tales (Honeywell stumbling when Nest Labs came out first with a smart thermostat).
The authors make the case that “traditional methods of strategic planning, risk analysis, and decision modeling are now less effective because there is just too much uncertainty at the periphery and too little stability at the core.” Instead they argue for an approach that enables companies to sense and respond to warning signals ahead of rivals.
This approach includes the employment of “staged commitments” that allow a leadership team to avoid the false dichotomy of over committing to one strategy in haste or doing nothing while waiting to see how things play out. Staged commitments allow for quicker pivots toward new opportunities, as illustrated by established players in the hearing aid and life insurance industries facing potential digital disruption.
Investing in strategic options, creating alliances with outside partners, and avoiding overly analytical decision-making processes are just a few of the ways firms can be prepared to take timely action. Together, the components of a staged commitment approach help leadership teams quickly embrace an opening in their market, prevent costly missteps, and avoid being left behind by competitors.
But See Sooner, Act Faster isn’t just another management idea book. Day and Schoemaker, both strategy experts with current and former leadership roles at Wharton’s Mack Institute for Innovation Management, provide an actionable roadmap for developing leadership vigilance. As they note in their introduction, “relentless turbulence can be managed, just as whitewater rapids are navigable with a vigilant guide. But it demands different capabilities from those used to manage the current operations.”
Skill-building tools and lessons include how to allocate the scarce resource of attention, detect weak signals and separate them from background noise, and respond strategically before competitors do. A diagnostic survey can be used to assess current levels of vigilance in your organization and your leadership, and an action agenda offers tips for fostering vigilance and agility throughout an organization.
Day and Schoemaker stress throughout their new book that vigilance can be systematically developed and strengthened by a motivated leadership team. Establishing new capabilities and adjusting current strategic practices require time and commitment. But the rewards — stronger market positions, higher profits and growth, and more motivated employees — make that effort key to organization longevity and even survival.
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