If a firm fails to change as fast as the competitive environment, it will eventually fail; it is not a matter of “if” but “when”. The ability to adapt is a measure of intelligence, and yet many firms fail to do so, showing remarkably low strategic IQ. They delay until it is too late. Smarter firms continuously adapt; they pull ahead in good times, and are more resilient to crisis.
Success sows the seeds of failure. No-one wants to change a winning formula. Successful firms often agonize over when to change, but they are asking the wrong question; they should always be changing. The real real question is not “when” to change but “how”.
The four dimensions of practical intelligence for the successful executive:
Rational: thinking your way through problems logical
Creative: seeing things in a differ way
Emotional: understanding why you react positively to some things and negatively to other
Social: influencing the emotions of others
Combine this with curiosity, commitment and courage to learn, and you have someone who is really going to drive results.
- They have a clear strategy: its hard to change if you don’t know what you are doing
- They are never satisfied – always trying to improve their current strategy.
- They are always looking to destroy themselves before the competitors do – trying different business models, new approaches
The crisis of 2008-2009 was a leadership crisis. Many leaders had failed in their duty to lead responsibly. Responsible leadership is not only getting the right results, it is getting them in the right way, considering all the constituencies firms serve.