The power of blind spots. What companies don't know, surprises them. What they don't want to know, kills them

Abstract

Purpose

Management blindspots kill companies, even if management is smart and lucky. This paper is a case study of a market leader whose management failed to heed a strategic threat and choose a new strategic direction until it was too late. This piece suggests a conceptual approach to creating a strategic early warning process that may be capable of overcoming top executives' blinders.

Design/methodology/approach

The method of research is a detailed case study, combined with a conceptual framework addressing issues of board involvement, managerial span of control and confronting change.

Findings

Traditional mechanisms aimed at early warning fail to address blindspots regarding deep strategic threats to the organization's survival. Strategic fissures in the basic business model can be ignored for a while, and delaying tactics such as diversification can hold off the collapse of the model for years, but eventually, it will kill the organization. Companies need to re‐think their approach to early warning.

Practical implications

Replace traditional early warning processes with a more powerful early warning tool involving selected board members, an early warning team, and a process initiated at a threshold. That may be the only way to overcome top executives' denial mechanisms.

Social implications

Boards should be careful not to interfere with management, but also not to allow “blinders” to kill the organization. Boards can take a more positive and forceful role in debating early warning signs.

Originality/value

Management blindspots in addressing serious strategic threats to a company's business model are a major cause of failure. This paper suggests a mechanism to fighting management blindspots, calling for the first time on Boards to get “down and dirty” with middle management and top executives in a unique way aimed at creating a powerful strategic early warning process.

Citation

Gilad, B. (2011), "The power of blind spots. What companies don't know, surprises them. What they don't want to know, kills them", Strategic Direction, Vol. 27 No. 4, pp. 3-4. https://doi.org/10.1108/02580541111115401