Boards spend only 9% of their time considering risk.
(2017: 1,126 sample)
Only 6% believe they are effective at managing risk.
“On strategic opportunities and risk trade-offs, boards should foster explicit discussions and decision making among top management and the businesses.”
McKinsey: October 2018
Conventional strategies are...
- Backward-looking, not forward
- Linear in nature, often based on un-tested assumptions
- Artificially “quantitative”, resulting in a false sense of certainty
- Preventative of rigorous criticism during development, due to collaborative incentives
Frequently avoid discussing the “elephant in the room”, because they:
• Don’t have an answer
• Don’t want to put their egos/reputations at risk
• May not even know the elephant exists
• May have authored the “elephant”… a dated and failing strategy
Possess key facts since they are “in the trenches” everyday vs. competitors
Have less ego involvement in the current strategic plan
Are fearful of contradicting/embarrassing senior management in meetings
TYPICAL CORPORATE RESULTS:
Same old, same old.
THE IMPLICATION: Failure is almost guaranteed in a highly dynamic world.