A sound strategy is necessary for success but that plan may lead to success or failure. That’s the strategy paradox.
Kodak (founded in 1888) is a good example of this. The company had a ton of success over generations; however, it did not embrace its own digital photography invention back in 1975—and missed a lot of revenue as a result. More recently, they began producing pharmaceutical ingredients—another strategic pivot that may ultimately increase their value.
Lego (founded in 1932) is another example. Originally, the owners were determined to provide a quality experience with limited designs. The company expanded for a while, and then sales dropped as the next generation tired of the same, limited building block options. A new leadership team recognized that the old strategy had grown the company significantly in the past but was not tenable. In 1978, Lego produced their now-famous minifigures and later would branch into board games, video games, theme parks, and entertainment, increasing their appeal and revenues exponentially.
The same great idea can quickly promote success and can quickly foster failure when not recognized and adjusted.
While looking at historical examples of other companies’ successes and failures is easy, how do you confront the strategy paradox in your current environment?
Start by considering what you control and what is out of your control. Both can powerfully impact your success, and you can prepare accordingly.
“The solution to the strategy paradox is to separate
the management of commitments from
the management of uncertainty.”
– Michael E. Raynor
Action Steps
Here are some ways to work through the powerful aspects of strategy:
Separate. Divide your planning and resources between brainstorming innovations and implementing solutions. One group is discovering and weighing ideas, and the other is wrestling with how to implement them.
If those approaches happen at the same time, new ideas may be quickly undermined by logistical challenges before the concepts can fully develop. Don't kill an idea before it's fully formed!
Experiment. Lean on experiments to test ideas with minimal risk or costs. Seek compromise between the imagination of strategy and the practicality of execution by testing an idea before a potential full rollout. Proving an idea’s value and finding devotees will build the case for raising and allocating the resources to expand on the project.
If the idea doesn’t work, you can revisit the plan, the implementation, and the market. You may decide to adjust or abandon the project.
Face Uncertainty. Force the question, “Why would this not work?” to discover ways to identify, prevent, and mitigate bad results.
If the initial response yields no answers, challenge everyone to bring at least one suggestion to a follow-up meeting.
List Options. Compile a list of all ideas, people, and companies that closely match your strategy. When weighing future decisions, view how they handled similar circumstances.
You may designate someone to imagine themselves working at a company on the list. They then will contemplate how that business would respond. Someone else may also go through the same process, imagining themselves working for a competitor. Have them describe how a strategy would positively and negatively play out.
Avoid Biases. The cognitive bias of sunk cost is when you decide to continue with an idea just because you have already put a lot of time and money into it, regardless of whether you’re satisfied with the outcomes. While it’s disheartening to change course, that should not be the reason to avoid action.
Confirmation bias describes our inclination to find information and data that supports our own ideas rather than seeking out unbiased information that may challenge our beliefs. Ensure discussions weigh all options and opinions.*
Seeking Feedback is Critical
Solicit broad input internally through brainstorming and working sessions and externally from investors, advisors, clients, partners, vendors, and research groups. Discuss ideas early and openly to anticipate problems and address concerns before they magnify.
Create channels for collecting customer and team input constantly. You want complaints and concerns to turn quickly into engagement and high customer satisfaction. Also, don’t wait until the finished product to start incorporating feedback: Create designs, mockups, prototypes, and MVPs, and force opinions throughout the process.
If the feedback remains negative, you need to decide if and how to change course.
Key Takeaway: Face the strategy paradox by recognizing that every choice has pros and cons. You must live with some uncertainty, so install methods to verify progress objectively.
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Photo by cdd20 who can be found here.
* To learn more about cognitive biases, visit this article.
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