In post 2 of 3 (Read Post 1) on Fast Strategy, by Doz & Kosonen, we will be continuing the summary of the featured chapters and a discussion on the human side of strategic agility.
By Mo Sook Park, Staff Writer
In Fast Strategy (2008), Yves Doz and Mikko Kosonen effectively acknowledge the role that the human side of organizations plays in building strategic agility. In a chapter titled “Mobilizing Minds”, the authors recognize that although not visible, human cognition plays a critical role in rebuilding strategic agility that is lost during a period of momentum.
Referred to as the “curse of success”, Doz and Kosonen explain that success and prosperity causes the erosion of the following three dimensions of strategic agility:
- Strategy sensitivity: Sensitivity and awareness of internal and external trends begins to dull.
- Collective commitment: Cohesion among leadership and staff begins to fragment.
- Resources fluidity: Resources begin to be more rigidly protected as business units become more siloed.
As Doz and Kosonen describe, success creates new perceptions, reinforced by further successes, which in turn, justify set-in behaviors; once lost, the only way to rebuild it is to facilitate shifts in these perspectives. The three requirements for changing cognition are: initiating a break in the old paradigm of thinking, broadening the vision and perspective, and challenging the tension between the old and the new.
The authors explain that one way to trigger a shift in cognition is to introduce a crisis – an intellectual, operational, or strategic crisis that elicits a new way of thinking. For Nokia to re-realize its need to be more sensitive to the trends around them, it required taking executives to see first-hand the central role technology plays in Japan. For another company it meant setting a stretch goal where the CEO publically announced an unreasonable goal that forced the company “to break out from existing cognitive schemes”. In both cases, employees were forced to question their assumptions and change their thinking. For both companies, crisis initiated the shifts; however, crisis is not the only way to create such a shift.
Cognitive change can also be initiated by planting what Doz and Kosonen refer to as “seeds of change” that function as place for change to begin. One way to plant a seed is by launching a corporate venture. Nokia planted a seed with its Nokia Ventures which sought to discover and develop new business ventures. The new business ventures helped widen their vision and evolve existing business endeavors. SAP plated a “seed of change” by acquiring a small Silicon Valley company, which forced SAP to break from business as usual, re-evaluate their sensitivity to the market, and broaden their vision for their future. Nokia also broadened cognition over time by accumulating “new evidence, new experiments, and growing seeds into a major transformation.” These are only some of the many examples provided by Doz and Kosonen to demonstrate how companies can create conditions for cognition to shift and for strategic agility to be rebuilt by planting of “seeds”.
For the authors, “the critical point is that, no matter what approach is taken, is to allow the new cognition to progressively permeate the old, in a credible way, which both subjects the company’s cognition to tough reality checks and relevance tests, […] and makes the established business receptive to new learning and new knowledge.”
Ultimately, what makes this chapter so effective is that Doz and Kosonen offer a logical and persuasive argument in favor of acknowledging the role of human cognition in the context of rebuilding strategic agility. However, it is worth noting that the facilitation of cognitive change requires a culture that is driven by leaders who actively value the human side of the organization. Cognitive change requires leaders to acknowledge the complex process that take place on the individual and organizational to shift their way of thinking. Leaders must also acknowledge that shifting one’s perceptions can, at times, be a painful process. Accordingly, leading such change processes requires continued commitment and investment of energy on the part of leadership. In other words, leaders have no choice but to make a priority of capturing the humanity behind effective strategy.
Next Week’s Topic: “Energizing Hearts” whi
Upon reading hundreds of articles on management innovation, I have noted a recurring theme about how culture drives strategy. Zappos, Southwest, and Valve, to name a few, are repeatedly cited as companies that have demonstrated the importance of culture. In these companies, culture not only drives strategy, it also grounds and guides it. Culture provides the cohesion, consistency, and purpose that is needed when one is operating in a context where change and uncertainty is pervasive. Strategic agility is no longer an option if companies wish to not only survive, but thrive. And, since culture drives strategy, then culture is an essential part of strategic agility and thus plays a critical role in building a company’s capacity to perform. Fast Strategy (2008), by Yves Doz and Mikko Kosonen, further strengthens the case for culture and its role in building strategic agility.
One definition of “culture” by Merriam Webster dictionary is “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization”. Although the word “culture” was only mentioned a handful of times in Fast Strategy, the authors unpeel the concept and zero in on the human behaviors that underlie and create company culture. Specifically, they discuss how companies should recognize the need for fostering cognitive shifts and harnessing emotions. Contrary to what most would expect to find in a book about strategy, for Doz and Kosonen, human cognition and emotions are “powerful levers to rebuild strategic agility”.
Essentially, Doz and Kosonen remind leaders that in order to create change and remain agile, companies must invest in the people that make up their organization. The book is grounded in over 150 interviews, small groups, and background research focused on four technology companies (IBM, Nokia, SAP, and HP). From their research, they find three key dimensions of strategic agility: strategic sensitivity, collective commitment, and resource fluidity. The authors explain that leaders must recognize the very human side of rebuilding those capacities; and human behavior can either prevent or enhance your company’s capacity to be strategically agile.
As someone who is drawn to literature on the human aspect of organizations, Fast Strategy was a breath of fresh air. The authors artfully tie in the very human dimensions to strategy, producing a work that is respectful of the complexities of both the human and the organization. As a whole, the book serves as a powerful message to leadership that strategic agility is not possible without a deep understanding of human behavior in organizations. And, such an understanding can in fact not only drive but ground and guide strategy.
In the coming two weeks, we will delve more deeply into “Mobilizing Minds” and “Energizing Hearts” as key factors for rebuilding strategic agility in your company.
In brief: “Mobilizing Minds” is about how rebuilding strategic agility is “primarily a cognitive task”. In other words, rebuilding strategic agility requires a shift in perspective, and, thus, needs to be addressed as such. This is especially true when agility is lost during times of momentum and success. “Energizing Hearts” explains that emotions are a powerful lever to rebuild agility that is lost as a result of stagnation. Companies that tap into emotion effectively can re-energize and strengthen the three dimensions of strategic agility. Doz and Kosonen have effectively tapped into the human underpinnings of culture as a wellspring of strategy.
Next week’s topic: “Mobilizing Minds”
By Mo Sook Park, Staff Writer