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How to avoid the ‘competency trap’

Failing To See The Future

  • AT&T invented the telephone and began working on mobile communication as early as the 1940s, yet it was Motorola which eventually created the first hand-held cell phones for the mass market.
  • Kotak, the film company, had a digital camera sensor ready in the 80s, yet chose to continue focusing on film and film-related products, as it was the cash cow of that time.

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How to avoid the ‘competency trap’

How to avoid the ‘competency trap’

https://www.bbc.com/worklife/article/20200608-what-is-the-competency-trap

bbc.com

5

Key Ideas

The Competency Trap

The company having the original PC technology back in the 70s was Xerox. This was a time when their photocopiers were a worldwide hit, and even their brand name ‘Xerox’ was used as a verb. They had a research centre to develop new technologies, where they invented the PC (similar to what we see even today) and a graphical word processor. But even after inventing futuristic products, which were inspirations for what Steve Jobs and Bill Gates did for the computing industry, Xerox failed to capitalize or commercialize them.

Past success and entrenched expertise prevented the pioneers of great technology to deal with a changing, uncertain and fast-moving market. Xerox forgot to grow, evolve, stay nimble and keep an eye out for the changing market dynamics.

The Problem Of Success

Successful organizations start having rigid corporate cultures, which crumble when the outside world evolves, which is always inevitable.

The rules and assumptions that companies operate on, become embedded, making the employees blinded from any potential future innovations.

The Sunk-Cost Bias

... is a reluctance to give up on the past spendings and investments made on projects or products that are no longer providing any return.

The managers are usually unable to make strong decisions and keep adding costs to failed (or about to fail) projects.

Failing To See The Future

  • AT&T invented the telephone and began working on mobile communication as early as the 1940s, yet it was Motorola which eventually created the first hand-held cell phones for the mass market.
  • Kotak, the film company, had a digital camera sensor ready in the 80s, yet chose to continue focusing on film and film-related products, as it was the cash cow of that time.

The Competency Trap: Lessons

  • Companies which have the potential for falling in the competency trap may require an overhaul.
  • Old-school managers who are blinded from future innovations need to be updated.
  • Employees and managers should work within the research and development departments for some time to help them let go of their cognitive rigidity.
  • Freshers and junior employees have innovative viewpoints and need to be heard by senior management.

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  • Able to operate on and enable environments that are more dynamic, team-centric, and connected.
  • Lead and build teams and partner with the broader ecosystems, keep people connected and engaged, and drive a culture of innovation, learning, and continuous improvement.
  • Lead a workforce that includes contractors, the contingent workforce, and crowd talent.
  • Understand how different business functions, industries, and technologies come together to form solutions.
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Demographics And Leadership Destiny

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Metric Fixation

Metric Fixation, an epidemic in most of the world's biggest companies is a way to measure employee performance primarily by numbers, counted, tallied, compiled and analyzed in daily, weekly or mont...

Incentivizing Leads to Gaming

The rewards of the metric performance measurement can be as a form of a monetary bonus, stocks or just an enhanced grade or designation, leading to competition among employees. This leads to many employees gaming the system to affect the bottom line of their metrics.

Example: Surgeons can refuse to treat patients having a complicated condition, as it may affect their failure rate.

Ignoring Real Values

Metric fixation can make employees ignore the real values and goals of the company and focus on their short-term weekly or monthly goals so that they keep their jobs, get a pay raise or have their stock options out at the right time.

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Scenario planning

It aims to define your critical uncertainties and develop plausible scenarios in order to discuss the impacts and the responses to give for each one of them. If you are aware of what could h...

How to use scenario planning

  1. Identify your driving forces: the big shifts in society, economics, technology and politics in the future and see how it will affect your company.
  2. Identify your critical uncertainties: pick 1-2 of the driving forces (with the most impact).
  3. Develop a range of plausible scenarios: Form a kind of matrix with your two critical uncertainties as axis and depending on what direction each of the uncertainties will take, you are now able to draw four possible scenarios for the future.
  4. Discuss the implications: discuss the various implications and impacts of each scenario and start to reconsider your strategy: set your mission and your goals while taking into account every scenario.

Some pitfalls to avoid

  • Don't fall into the trap is to be paralyzed by the multitude of possibilities. Keep it simple and focus on two major uncertainties.
  • Don't believe that you have to choose one particular scenario and build your strategy around it. Scenario planning is not about choosing just one option for the future but rather dealing with all of the possible outcomes to develop a strategy that will stand the test of all scenarios.
  • When developing your different scenarios, try to not look at the short term. Do not hesitate to look far ahead, anticipating what the market and competitors are going to be over the next years.