When I look back at all the boardroom discussions about strategy and taking strategic decisions, one thing sticks in my mind: most companies will defer, delay and avoid any decision for as long as possible except when facing a direct threat. When I knew that a strategic move was necessary, the way to sell it to the board was to dress it up as a direct threat; “we saw competitor X talking to these people at the tradeshow. What if they acquire them?”. Result? Immediate action.
It is surely very strange that a group of people who have been charged with the strategic direction of a company, and who have met to specifically discuss it, will do anything rather than knuckle down and discuss it. Here is my incomplete list of what company boards do rather than discuss strategy:
- Discuss the current problem with debtors (up to 75% of boardroom time at one company)
- Try to outguess the competition and discuss how stupid or deceitful they are
- Try to analyse sales figures for up to 5 years into the past in order to try to forecast what the last 10 days of the quarter might bring (no, really)
- Fret over whether they might have to move premises next year
- Moan about car parking
- Fantasise about how everything would be much easier if only they were in a different industry
But really engage and discuss strategic options and make concrete decisions on what to do, or even what they need to know in order to make those decisions? Nope.
Introduce a little fear into the discussion and things are very different:
- Supplies of component X are running low, what if the competitors snap them up?
- We could be wiped out by technology Y, I’m sure that this university is close to cracking it.
- Potential customer Z has a high profile project coming up, if we let our competitors’ supply the equipment then we might as well give up the game.
None of these turned out to be real threats, but all of them galvanised the board into detailed strategic discussions which consumes vast amounts of time. What consumed no time at all was building a vision of the industry in the future and how we were going to deliver innovative and disruptive products to meet customer needs then.
“I have a theory that the truth is never told during the nine-to-five hours. “
Hunter S. Thompson