Troubleshooting diminishing returns

Not too long ago, I gave some hints on why leaders of businesses must urgently adopt the “contextual CEO” strategy to ride the storm of volatile and radically shifting marketplace. I stressed the advantages of imbibing the ambidextrous technique, that is, ability to “write with both hands”. This distinguishing characteristic of the ambidextrous leader enables him to shuttle between the exploit and explorer modes in his daily decision-making.

I noted that a check on organisations’ health has revealed a red flag if we do not improve upon traditional linear business models and strategy frameworks. We cannot keep holding on to safe profitability and rigid boundaries in the present challenging business environment.

In this article, I am going to draw our attention to the danger of being trapped in incremental improvements on short term goals.

Apple, a gigantic enterprise that today conveniently delivers annual sales of over one hundred billion dollars, once declined and almost failed because it held on to traditional strategies and technologies. Even when it took steps to make the strategies more efficient with some form of innovation and some cherry-picked new ideas.

As a result of the decline in its market share, it had to adopt a completely new architecture that accommodated and encouraged values derived directly from customers’ experience. It adopted as a matter of survival, iterative direct customers’ initiatives. Its values were deliberately attuned to customers’ preferences. Direct sales and aligned-to-customers’ marketing strategies were also introduced.

One strategy that it also adopted was design thinking based on bold market-oriented business experiments.

Design thinking is a philosophy as well as tools that enable smart organizations solve problems creatively. It is the human-centered strategy of creative problem-solving. Since the approach is human-centered, it involves a lot of empathizing. You must figure out who you are designing for, what their needs are, and then, solve their problems. You innovate based on your customers’ needs and not from the technology perspective.

Design thinking steps are therefore, very flexible and its implementation processes include; ability to empathize, define, deduce solutions, create prototypes and then, test the prototypes with customers and potential customers.

As I said earlier, we must not get trapped in the usual success syndrome. We should say no to rigid metrics, targets, KPIs, structures and processes that are not smart.

The business model in this shifting and challenging business environment should be creative, big and bold experimentation. We can adopt three types of innovations with each reinforcing each other. They are: tailor-made and specific result-oriented efficiency, organisational design innovation and transformative innovation.

Through transformative innovation, we can explore market opportunities, adapt technologies and tailor-make business models. Also, we should adopt value propositions that enable us to lock in customers and improve on predictive incomes.

Also, collaborative problem-solving strategy will get rid of unproductive selfish tendencies. We must pool together skill sets and encourage value-adding opinions. There is no ‘I’ in a team and there is no ‘I’ in a problem. The energy quality and strength of the whole team determine success of organizations. Leaders and associates must fully commit to daily adaptable actions to market needs. Attention to details and commitment to innovative improvements, must be emphasized.

Today, there is a greater need to create an inclusive culture in the workplace. Leaders and associates must speak with integrity. They must not make assumptions and must always contribute their best.

We must encourage an environment of dignity and respect. Everybody must be treated fairly and have equal opportunity to access information and resources. The workplace must be a healthy place where everyone belongs through participation and contributions. There must be openness. We should all be sharing knowledge, ideas, useful experiences and discoveries.

Corporate culture, a critical competitive advantage must be creative and not a silent killer of innovation. There must be sincere alignment of organization and people. We call this the creative habit cycle. The workplace must make the dream work through productive habits.

Let me conclude with Judith Glaser’s corporate leadership trilogy, the Magic Triangle. According to Judith, the workplace must stand on three pillars: a positive and open environment for new wisdom.

We must share challenges, uplift experiences and discuss discoveries. The third leg of the magic triangle is encouraging feedbacks and marketplace-inspired innovations.

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