I recently completed a ten-week product strategy engagement with a Fortune 100 client in the medical device space. We (Fahren) were hired to lead a 10-week voice-of-customer and product strategy engagement. The client was eager to become a customer-centric organization and we were excited to help. Within the project, we developed personas, journey maps, customer research, and interviews, jobs-to-be-done analysis, and product roadmap. To achieve this, we guided the team through workshops and activities to get them to see their business from a new angle.
As we moved deeper into the work, it became clear that our client was at a tipping point. In recent years, several factors changed, including the competitive landscape, the expectations of customers, and the pace of technology change in the market. The client still maintained a large percentage of their market, but it was hard to ignore the indications that they were facing some challenges.
Given this new landscape, it was easy to see how the organization could take several paths forward. On one path, they could get focused and improve their speed of ideation, execution, and delivery. This would enable them to remain the market leader and continue to drive growth for the company. On the other path, they could continue to on their current trajectory – move slowly and reactively to market changes. This would allow nimble, well-funded competitors to gain market share. To leadership, it felt like sharks were circling them as they drifted in the ocean, waiting for their chance to attack.
To go down the first path, the team needed to elevate how it thinks and how it delivers new value to maintain its competitive advantage. While the client absolutely needed to become more customer-centric and change how they think & deliver, the real business problem holding them back was their own institutional inertia.
What is institutional inertia?
I like how Col. Mickey Addison describes it: “It’s the collective weight of established processes, individuals’ self-interest, and even outside stakeholders’ pressure to remain at the status quo. The larger the organization, the higher the institutional inertia, and the harder it is to move that organization in a different direction.” http://www.mickeyaddison.com/2016/06/22/overcoming-institutional-inertia-lead-change/
For our client, they were stuck with too many competing priorities and too many projects in the pipeline. What they really needed was organizational focus on the select capabilities that would help them compete and to stop non-critical work that was taking precious team capacity.
Are you stuck?
Here are several questions that can be leveraged to tell if institutional inertia is preventing your company or team from operating optimally:
- Are your teams still structured and aligned as they have been for 5-10 years?
- When analyzing your internal governance and financial models, are you strategically calibrating and budgeting on an annual basis?
- What are the institutional incentives in place for leaders, teams, and employees to drive innovation, enhance the customer journey, and act with urgency and agility? How are people being hired, fired, and promoted?
- Are you slower to market than your competitors?
- Do you have technology and systems that are brittle and inflexible?
- Are your strategy and roadmap PowerPoint slides largely unchanged from the year 2000? 🙂
If you answered yes to any of the above, you may be stuck behind institutional inertia that wants to keep the status quo. Here are some ideas on how to start to change the conversation.
Recommendations on where to start
- Refocus on the customer. This should go without saying, but if the team is more focused internally than externally, innovation will be difficult to achieve. If your teams are more concerned with hitting deadlines and appeasing internal stakeholders than they are with customer problems, it’s time for a change
- Leverage product discovery methods to ensure what you are building is 1) going to be used by customers, 2) easy to use by customers, and 3) is technically viable for the organization to build, and 4) will drive business benefit
- Establish key north star priorities. Align the leadership team to them. Make the hard decisions that need to be made. Kill the many average projects to focus on the great ones.
- Don’t forget about the change management that will be required to realign teams and build internal support. Culture trumps strategy. Make sure the team knows why this is happening and how it impacts them individually.
- Get outside perspectives. This can be through new talent, agencies & partners, attending conferences, or any of the numerous other ways to get out of your 4 walls. “Rule No. 1: There Are No Facts Inside Your Building, So Get Outside.” ― Steven Gary Blank, The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company
- Define what great looks like for your organization. No two companies will do it exactly the same. There is no perfect process. Don’t be afraid to try new approaches and modify them as you go
- Focus on the operating system of the organization. Governance, prioritization, internal processes, and organizational structure all play a part in keeping the status quo. Focus here to break institutional inertia
Leaders drive the culture of innovation and agility. Senior leadership should encourage and support their teams to move at the speed needed, empower them to make decisions, and have the authority to take risks in order to meet the overall business objectives.
If you are a leader within an organization that is fighting to change the team’s path forward, stave off competition, or regain market share, your job is to break the institutional inertia that is in place. This becomes more difficult as the size and age of your organization grow. To make that change, instead of putting your foot on the gas pedal, consider taking it off the brake. Doing so might just save your business.