Strategy, Productive Paranoia and Boiling Frogs

A friend of mine, who is a social media strategist, talked in a recent blog post about what happens when companies hang on to a strategy for too long.

Jeremy Miller believes that they either:

  • Never live up to their potential (even if they make a profit and do good work).
  • Or they stagnate and decline.

The reason they hang on to their strategy, he says, is because it’s hard for owners and their teams to accept that they need to change when things – top and bottom line – are going well.

I know that’s true from my experience over the last 10 years at ProfitPATH – and also from  my corporate days, where I experienced it first-hand.

Jeremy mentions that, in the book The Lean Startup, Eric Ries argues that a business must constantly evaluate whether to persevere with their strategy or “pivot” to a new one.

But how do you know when to pivot or change a strategy?

I think the need to change (and therefore the timing) is driven by events. I gave some examples of them in early February 3 Times You May Need To Change Your Strategy

But, if it’s driven by events, is waiting for them to happen leaving things too late? Yes, possibly – maybe even probably.

So how do you anticipate events before they occur?

Ries’ theme of constant evaluation is echoed by Jim Collins, in his book Great By Choice. Collins’ research shows that one of the things the leaders of successful businesses do is instill a “productive paranoia” in their culture. They and their teams are always thinking about and discussing things that could change in their world – and how those changes would affect them.

This type of paranoia is productive because it gives successful companies the opportunity to consider their response – as opposed to reaction – to the events beyond their direct control.

But to be productively paranoid the owner and her team must refuse to succumb to 2 temptations.

The first is to simply be paranoid – in the conventional sense. Owners who do that are in a constant state of (over) reaction and are likely to change strategies too soon and too often.

Remember, there’s a world of difference between a response and a reaction.

The second is the temptation to become complacent. It is hard enough to accept the need for change when a company is successful. And the longer the success continues the more likely it will produce feelings of security, even invincibility and, that least attractive and most destructive of human characteristics – arrogance.

So what’s an owner to do?

No owner sets out to become complacent – that’s not the issue.

The issue is that it can be hard to recognize a problem when you’re right in the middle of it. In fact they even have a name for that.

It’s called the boiling frog syndrome.

So when someone tries to tell you something about your business which you think is wrong, misinformed, or even ridiculous, take a moment to do the “Man (or Woman)  from Mars” test before you dismiss them out of hand.

Don’t know what the “Man (or Woman) from Mars” test is? Call me and I’ll be happy to tell you for the price of a cup of coffee.

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Tags: business, Culture, Jim Stewart, owners, paranoia, productive, ProfitPATH, reaction, response, strategy, success, successful businesses

Comments

  1. Dwight Lacey says:

    I really like this article. For those of us who have a bit more “road wear” there was a very compelling argument made years ago by several strategic thinking experts from Shell (Schwartz, Arie de Guise) that companies should be doing scenario thinking. Pull together 3-5 equally probable scenarios of how your industry playing out in the real world might behave. Given that thinking you are already “somewhat prepared” for any of the scenarios. Their experience was that none of the scenarios ever played out in their entirety but rather that pieces of each seemed to occur. With the preparation done and a very high level perspective on “how would we respond” to each element of each scenario the company is now out in front. I used the analogy of a radar screen to describe how each scenario and each key element needed to be tracked for speed and direction and monitored for when it became necessary to adjust and respond to what became a clear threat or opportunity.

  2. Jim Stewart says:

    Dwight, many thanks for sharing your experience and insight. I really liked your radar screen analogy and I can see how scenario thinking gives a real edge when it comes to execution. And, by the way, I too have a bit more “road wear”! Jim

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