The yin and yang of business

Most companies struggle to expand the frontiers of their business while maintaining focus on their current venture. Trying to discover new innovative ways to grow while doing everything to leverage the current opportunities isn’t easy. Only a few entrepreneurial firms are actually able to successfully pull off both — and that too, only in short bursts and seldom over long periods in their history.

Let’s be clear: Companies need to balance operations and innovation. They need exploration and exploitation. And stoke curiosity and maintain focus. Both states are necessary for success. Unless you can win the short-term battles, it is unlikely that you will have the funds to wage and win the long-term war. And if you focus too much on perpetually discovering new ways to do business, the chances are that you will run the risk of not sufficiently exploiting the current opportunity and rush ahead in the constant, seductive search for the new opportunity.

In many ways, this remains the eternal challenge within the corporate sector. Most CEOs, leadership teams and boards understand this intuitively. But it is another matter whether they are able to create the conditions within that help them develop the capacity to keep renewing themselves every few years.

So what does it take to create an impactful firm that remains relevant in future?

Don’t snuff out curiosity

Focussing on operational excellence isn’t a bad thing per se. I was at a lunch with a senior executive at a leading company earlier this week. During the lunch, our conversation kept getting interrupted by calls from his customers. He said it was common for him to receive calls from customers, even junior executives from the shop floor, throughout the day. And to fend off competition, he had to keep such folks happy. We are a traditional company, he said. We are focussed on running our business smoothly. We’ve seldom invested the time to learn new things that lie at the periphery of our business, he said.

This is a common occurrence in many organisations that I know. They are so obsessed with current operations — and the dynamics of their own industry — that they seldom look beyond to see what’s changing at the fringes.

On the other hand, I know of an amazing entrepreneur who had, throughout his career, the foresight to see what’s next and to constantly reinvent the business. Yet, leadership is a team sport. And building the same conviction internally within his own organisation became a challenge. Since people down the line simply didn’t appreciate the need for change, it became a massive obstacle.

Instead, one way out is to periodically throw a challenge at their smartest executives to step up and explore new frontiers and come up with new ways of harnessing growth. And there are enough creative ways to design such challenges.

Instilling discipline

Building a culture of learning needn’t be episodic. Instead it requires a continuous, collaborative way for leadership teams to come together and build a shared understanding of the strategic challenges facing the business. Above all, it requires the discipline and rigour to ensure that learning journeys result in real progress. That’s where a lot of well-meaning learning initiatives come undone. When you throw challenges at teams, framing them as action learning projects — and putting in place a governance mechanism to coach these teams and monitor their progress, and finally, building prototypes and testing them iteratively is just as important to get full value from these efforts. 

Equally, sifting out where to look for new learning is as much an art as it is a science. Ten years ago, most businesses would refuse to share their learnings with peers for competitive reasons. Inbreeding created its own issues of complacency. Today, more and more pragmatic firms are realising that sharing what they know — and learning from their peers — is a smart way to enhance their own understanding. And therefore, building networks within not just their own industry, but even outside the country can be a big opportunity to unlock new insights.

Search for the unknown

Leadership teams that learn together, stick together. Building a shared understanding of the future begins with a collective search of the unknown. The future is invariably fuzzy and unclear. And it calls for the ability to deal with ambiguity and uncertainty. Leadership teams sometimes find it hard to cope with that. For instance, if you’re a successful big-box retailer and want to aggressively expand into convenience stores, you might well discover a network of such smart firms in other emerging markets that your can learn from. Yet your legacy of heady success could prevent you from viewing the opportunity in new ways. 

That’s why strategic learning often needs a new lens. Listening deeply to voices that are different from one’s own needs high levels of empathy and the ability to synthesise and coalesce different views. Above all, it needs the humility to learn.
 

The writer is co-founder at Founding Fuel, a strategic learning platform that aims to serve a community of entrepreneurial leaders