Here is an excerpt from an article written by Rick Lynch and Jay Galeota for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.
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Every leader wants to avoid major strategic mistakes, but, in a complex world, it’s hard to anticipate all the forces that might impact your goal. It’s vital to find weaknesses in your strategies before you implement them — and developing a rigorous process to do so.
The ability to poke holes in one’s own strategies is something the U.S. military has practiced and refined over centuries. Rick served in the U.S. Army for 35 years, retiring as a Lieutenant General, and has seen this firsthand. In the heat of battle, strategic planning that’s incomplete or simply wrong causes leaders to revert to on-the-spot decision making. While sometimes necessary, making it up as you go is more often associated with failure — and loss of life — and is often a symptom of ineffective or inaccurate anticipation of competitive moves or environmental shifts.
The same is true in business, and the techniques the military has honed can help executives anticipate problems and change course when necessary.
Build situational awareness
Simply put, situational awareness (SA) is achieved after a soldier has deliberately assessed an environment from various vantage points and has ensured that all potential perspectives have been captured.
In the business world, things are fuzzier — there are no landscapes, buildings, or troop movements to scan. But it’s still crucial to make sense of the environments in which we operate and foresee how different factors will affect our decisions.
One way to build one’s situational awareness is to talk through alternate realities. Although this sounds like science fiction, alternative realities are basically hypotheticals. We think X will happen, but what if Y or Z happens?
At Merck, where Jay served as Chief Strategy and Business Development Officer and President of Emerging Businesses, “alternate realities” were used to prevent “team think,” which frequently occurs when organizations believe the conventional view of a situation is the correct one.
To develop better situational awareness, start by forming teams and tasking them to develop alternatives based on different views of the same situation. For example, what if a new competitor enters the market earlier than expected? What could they do that would surprise and/or outmaneuver us? What if they are delayed; what types of things might they do to try to recover and penetrate the market more quickly? Could any of their actions be extreme or desperate? What actions could and should our team consider mitigating or blunting the risk in these alternate scenarios?
The next step is to compare these hypotheticals collectively and then determine what counter measures will have the most impact.
Most importantly, make sure to consider specific “triggers” that would indicate one or more of the alternative scenarios is unfolding. Agreeing on these triggers up front is useful because they prospectively define specific thresholds for change in action or direction. Once identified, you should track these triggers regularly on a dashboard that all senior team members see. This eliminates or greatly reduces debate when course changes become necessary and urgent. Then, make sure that group leaders complete an SA assessment regularly and discuss the alternate scenarios and triggers during each business review.
Small investments of time can result in new insights about your organization’s readiness, and your leaders’ acumen, that would have gone unnoticed until crisis.
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Here is a direct link to the complete article.
Rick Lynch served in the US Army for 35 years, retiring as a Lieutenant General. His last job in the Army was commanding all of the US Army Installations (163 world wide) with a workforce of 120,000 and an annual budget of $15B. He is the author of Adapt or Die: Battle Tested Principles for Leaders and Work Hard Pray Hard: The Power of Faith in Action.
Jay Galeota was the Chief Strategy and Business Development Officer and President of Emerging Businesses at Merck and is now the President of G&W Laboratories, Inc.