One of the most difficult habits to develop in learning to drive a car is to beware of blindspots – that area along the periphery of the car where we cannot see what’s happening. Despite the rear-view and side mirrors, there remains an annoying small area where passing vehicles or pedestrians cannot be seen. If you neglect your blindspots when changing lanes or turning, you put yourself and your car in jeopardy. Blindspots are an apt metaphor for many kinds of errors and misjudgments that boards of directors can make—mistakes that can be costly to their company. No matter how experienced, intelligent or well-educated directors might be, blindspots can create costly errors in oversight and decision-making.
As 2012 unfolds, a look back on lessons learned, and where my work, and my clients's needs and challenges took me this year. Quite a journey...
With the revelation of each new failure caused by "strategic short-sightedness," as illustrated by the recent Kodak, HP, RIM and Blockbuster failures, companies must rethink their governance systems and in particular the role of the board of directors.
As industries become increasingly complex, it is more difficult than ever to govern companies. As an executive or a board member, you are often responsible for identifying where the company might have underestimated a strategic risk, or where you are failing to see a strategic opportunity. Competia has developed over the past few years a systematic approach to enable management teams to examine your company's strategy and lead discussions around potential "blindspots" - untapped opportunities and overlooked risks. We are now introducing the "Strategic Blindspots Index"©, a systematic method to assess the risk of a strategic blindspot developing, and a way to compare a company's risk profile with industry peers.
In 2009, the Deloitte Ethics and Workplace Survey explored attitudes about social networking and pointed out the significance of social media for board of directors. 58 percent of executives felt that the reputational risk associated with social networking should be a board room issue. Yet, only 17 percent of executives said that they currently had programs in place to monitor and mitigate reputational risks that may arise with social network usage. Boards have since largely left it to management to figure out its social media strategy. When informally asked in a boardroom, Competia found that less than 5% of directors admit having ever used and participated in social media. Mistrust is widespread and the issue of privacy is of utmost concern. The implications of social media for the board far outreach reputation risk. As the use of social media is rapidly spreading and challenging every single company business model and strategy, it is time for directors to understand the implications for corporate governance.
Last winter, I was approached by one of the major investors in Skype, who thought that the research I have done on strategic blindspots would be very valuable for the new team leading Skype's strategy. I got very excited by the opportunity- not only do I use Skype, but I believe the company has succeeded in touching its customers in a rare and intimate way...
I rarely read business books, especially in my field, so I was very happy to receive a copy of the book "Competitive Intelligence Advantage"by Seena Sharp.