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Functional bias a roadblock to successful Strategy

December 10, 2019by Kishore JagtapBusiness

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Functional bias a roadblock to successful Strategy

December 10, 2019 by Kishore Jagtap

In 2018, many leaders saw their organizations focused more on developing new products and services and improving productivity than on adopting new business models or technologies. In 2019, leaders opine that some of the organizational roadblocks that appear to be limiting effective Industry 4.0 strategies.

  1. “Poor decision-making processes are holding back many companies globally”.
  2. Globally, 34 percent of the respondents indicated that the societal impact is the most important factor business leaders use to gauge success, whereas customer satisfaction remains a top priority for Indian executives (29 percent).
  3. In India, 85 percent said their organizations have developed a product or service to make a more positive impact on society compared to 73 percent globally.
  4. As many as 58 percent of Indian leaders said their organization has a clearly defined decision-making process.
  5. From India, 65 percent said they have permission from their leadership to fail and learn in the context of innovation (global 69 percent).
  6. Further, Indian executives are more concerned about the ethical usage of Industry 4.0 technologies (India 55 percent, global 30 percent) and are taking action.
  7. More than four in ten (41 percent) of Indian executives also indicated their organizations are investing in new technologies to disrupt the market, compared to 33 percent globally. (Source: Deloitte survey 2019)

The speed by which things are changing is increasing at astonishing rates, product cycles are much shorter, innovation is happening faster, and it is very challenging for the C-suite, as well as the employees, to keep up with the pace.

  • Executives are struggling to develop effective strategies in today’s rapidly changing markets
  • Leaders continue to focus more on using advanced technologies to protect their positions rather than make bold investments to drive disruption
  • The skills challenge becomes clearer, but so do differences between executives and their millennial workforces.

Faced with an ever-increasing array of new technologies, leaders acknowledged they have too many options from which to choose and, in some cases, they lack the strategic vision to help guide their efforts. Organizational influences also challenge leaders as they seek to navigate Industry 4.0.

The challenges leaders face in developing effective Industry 4.0 strategies are not limited to vision and technology. Many organizations are simply not implementing effective strategy-development processes. Many leaders reported their companies don’t follow clearly defined decision-making processes, and organizational silos limit their ability to develop and share knowledge to determine effective strategies.

The responsibility of top leadership is to find the right strategic approach for the organization to achieve high-performance business results.

The right strategic approach recognizes three factors, the structural conditions in which an organization operates, its resources and capabilities and its strategic mind-set.

A strategy is likely to be successful if all three propositions i.e. a Value proposition that attracts buyers, a Profit proposition that enables the company to make money out of value proposition and People proposition that motivates those working for or with the company to execute the strategy are developed and aligned to exploit or reconstruct the industrial or economic environment in which an organization operates.

In today’s environment of rapid change & uncertainty, one or two strategy propositions can be imitated, imitating all three especially the people proposition is difficult for achieving strategy alignment. People proposition requires the positive motivations and incentives put in place for people needed to support and implement the strategy.

It’s the responsibility of an organization’s top leadership to make sure that each proposition is fully developed and all three are aligned. They alone are suited to this type of broad strategy work; executives with a strong functional bias – marketing, manufacturing, human resources, or other functions – tend to miss the larger strategy picture. The marketing team, e.g. may dwell too much on the value proposition and pay insufficient heed to the other two. Similarly, executives with a manufacturing bias may neglect buyer needs or may treat people as a cost variable.

If an organization’s leadership is not MINDFUL of these tendencies, it is unlikely to develop a set of properly aligned propositions. The alignment of all three propositions are critical for high performance and lead to a more sustainable strategy in the long term.

The real difference between success and failures is strategy alignment….

Kishore Jagtap

IIM | business strategist | brand & marketing analyst | digital marketeer | entrepreneur | cyber law enthusiast |