About Strategic IQ
Strategy depends on the competitive environment, and since this is constantly evolving, firms must be ready to modify their strategies accordingly. Indeed, firms should not just look to respond to change, they should be driving it, shaping the environment to their advantage. And yet many successful firms fail to respond, sticking steadfastly to their old business models in the hope that they will continue to succeed in the face of overwhelming evidence to the contrary. The ability to adapt to change is a measure of intelligence; so why do firms demonstrate such low Strategic IQ? This book investigates why and shows how leaders can help build smarter corporations.
Firms suffer from inertia which reduces their strategic intelligence. There are three main types:
- Strategic inertia: the inability to change strategy in a timely fashion
- Structural inertia: firms that recognize the need for change but find their structure gets in the way
- Human inertia: people have a powerful capacity to resist change even when it seems to make sense for them to do so.
This book investigates these types of inertia, describing the symptoms and identifying the underlying causes, and then goes on to prescribe ways to create smarter strategy, smarter structure and smarter minds.
Firms must look to build smart, adaptive strategies, always striving to improve their current strategic model while testing new, radical ways to compete. This is the measure of high Strategic IQ. But before they can attain this, they must build strategic competence, a clear understanding of what a good strategy is, how to develop one and how to change it. There are no quick fixes. A firm must clime steadfastly up the ladder of strategic competence.
Smart strategy alone is not enough. Firms need smart structures that support strategic change, even drive it, rather than get in the way. And yet, structure is often internally inconsistent – an organization at war with itself, or misaligned with the current strategy. This is low Structural IQ. At a minimum, structure must be aligned with strategy, but it must also be easy to change when the strategy demands it. Ideally, it should drive change, pushing the firm to improve its strategy. This is high Structural IQ.
Ultimately, the capacity of a firm to change is limited by the ability and willingness of its people to change. Some are more open to it than others, so picking the right people is important. But firms must understand why humans sometimes resist change. Properly motivated, they have an insatiable desire to adapt and learn and, well-harnessed, this can be a powerful driver of success.