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Mar 26, 2012

What should strategy look like? (Part 2)

Keeping up with pace of innovation takes more than one person, making leadership a key need

By Dave Crisp

It’s harder and harder to know what to pay attention to and how far into the future to try to look for strategic direction.

Every industry, technology and science is innovating at a furious pace. Anyone want to try guessing what the next super-hot technology fad will be or how that will affect your business or service? Anyone want to bet their company on 'green" or on renewables that seem like solid long term trends, but aren’t yet anchored to any one sort of solution?

In the retail area, to take just one example, I know a growing number of people who are happily renewing much of their wardrobes via cast offs from trendsetters who buy the latest fashions and then give them away almost immediately — to the point where Goodwill and similar organizations are unable to handle one-tenth of what comes to them.

Are these trends that will continue, grow, fade or disappear? Should clothing retailers take the Best Buy route and offer to take trades on clothes that are still relatively new if the customer wants to buy the latest? Weird? But who knows? Like most things, this model won’t appeal to every customer or even perhaps the majority in the foreseeable future, but with the growing emphasis on "green" who can say for sure? Many people didn’t think self-checkouts would catch on and their expansion, while admittedly slow, is steady and growing.

The best route seems to be small pilots around a core objective of concepts that seem to have potential. But how many of these should you run at any given time? Who will work on them? How will they be monitored and judged, and how long to do you give them to make money?

You can take Amazon as an example at one extreme, where the make money piece would be more than 10 years away from massive initial and ongoing investments. During most of that initial start-up time, nay-sayers insisted this "interesting idea" would never work. Now it’s changing the entire publishing and retail industries and it’s annual report shows respectable profits. But it also lists possible dangers to continued business success that read like a handbook on risk. Apparently this doesn’t dissuade many meaningful investors, though the general investing public continues to be edgy.

The answer you choose has to depend on your own risk tolerance and ability to generate or find capital. But even more so, it will depend on having people who can take sensible, calculated risks and know more or less when to back off. This is a significant leadership challenge and, since leadership is learned primarily by trial and error, the people you trust with these decisions (including yourself) need room to make mistakes and reorient to better projects routinely.

Building a business has never been for the faint of heart, but to build at the pace many organizations need to achieve today requires the ability to lead others in the same processes. No single individual can conceptualize all the possible directions, tangents or spin-offs that will appear as opportunities. Nor can one person be in the right spot to recognize all those options and dive into them quickly enough to matter.

If there is any doubt left that leadership is the key skill needed today, it only requires looking at the businesses succeeding to see how much it matters. But a casual review typically fails to make clear the number and type of leaders below the key figure.

More needs to be studied to establish how this works. Typical biographies of the most talked-about individuals, like a Steve Jobs or Jeff Bezos, mostly fail at achieving this apparently because it’s easier to write about secretive, micro-manager individuals than collective efforts.

What we do know, from Jobs’ bios especially, is the ability to motivate others to extraordinary effort and results is a critical skill, yet we still fail to hear much about the individuals thus motivated or what they accomplished, as if all that’s required is the skill of motivating and then micromanaging. That’s not a plausible combination for most.

Again from Jobs bios we know many of his key people feel they accomplished stuff as much despite of him as because of him, though they typically say the challenging overall environment was a key feature.

The opposite approach is more characteristic of Google — a strong core objective and philosophy, but lots of freedom for the troops to experiment officially or otherwise during the 20 per cent of their work time they are allowed to devote to their own ideas and projects. It seems likely this is a more reliable model with greater sustainability, but time will tell and much of this challenge is still so new that the real handbooks on replicating these successes hasn’t been written.

So what's the strategy? Start from where you are and move in one of these directions — one that expands engagement and fosters sensible trial and error within some boundaries, toward some overall goal, but is otherwise fairly open. That seems to be the formula most likely to succeed at this point in our evolution. One way or another, develop people who can lead and manage others because that’s the incontrovertible piece. We can’t do it alone.

Dave Crisp is a Toronto-based writer and thought leader for Strategic Capability Network with a wealth of experience, including 14 years leading HR at Hudson Bay Co. where he took the 70,000-employee retailer to “best company to work for” status. For more information, visit
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