In 1998, Nokia became the best-selling mobile phone brand in the world. In 2007 (the same year Apple launched the iPhone), it boasted a 49.4 per cent share of the smartphone market, was valued at US$ 150 billion, and counted among the world’s top ten brands. Yet, by 2013, its market share had declined to just 3 percent and its handset business was acquired by Microsoft for US$ 7.2 billion. So – what happened?
Many say that Nokia was a victim of its own success. Having achieved market dominance, the company began playing it safe. They got stuck in the status quo, making only incremental changes and failing to anticipate the future. A culture of silence and myopia took hold: taking their cue from the leadership, employees became afraid to acknowledge competitors, address their own products’ technological shortcomings, and pitch new opportunities. Managers were focused only on short-term goals like meeting quarterly targets, instead of the longer-term health of the company. Eventually, all of these factors added up to a stagnant, inward-looking business that simply couldn’t compete in a dynamic marketplace.
Nokia’s fall from grace is far from unique – this is a story that has echoed across the world with growing frequency, as the business landscape becomes increasingly uncertain.
No company, no matter how successful it may be today, is immune to external shifts – from technological disruptions, to continually-improving competitors. To hold on to our position as a market leader, it’s crucial for us to nurture innovation and be able to pivot quickly.
So, this week, my message focuses on one of the biggest obstacles in the way of creating a nimble, future-ready organisation – status quo leadership. What does the status quo look like, and why do leaders continue to reinforce it? What can we do to break out of this deceptively comfortable trap?
Recognising the status quo
In his LinkedIn article, Status Quo Leadership, Professor Ajit Patil outlines a sobering vision of a company where maintaining the status quo becomes the ultimate aim:
Status quo leaders identify processes and systems which led to their elevation and try to establish them as a norm. Thereafter, their focus is on the due diligence. They design various formats to monitor their control. The employees are required to submit the reports at a regular frequency. Some positions are created to follow up and monitor the preparation of such reports.
Over time, the true purpose behind the reports is forgotten. The format becomes sacred, regardless of whether it is still relevant. Submission deadlines are set in stone, whether or not anyone is actually analysing the reports. Life at the office becomes report oriented – instead of being task oriented. Over-meticulous audits magnify small deviations and intimidate employees into taking zero risks. The entire culture suppresses creativity and initiative. People develop a minimalistic approach: instead of giving their 100 percent, they do as little as possible and resist stretch targets.
Such an organisation is clearly setting itself up for failure. So, if any part of this description rings a bell, treat it as a serious warning sign: it could indicate that you or your team have slipped into the status quo trap. If so, as the leader, you must take corrective action immediately.
Why do leaders reinforce the status quo?
Theoretically, most business leaders agree on the importance of innovation. We know it’s impossible to stay competitive while staying the same. We know we need to recreate growth instead of simply managing it. Yet, in practice, many leaders actively resist new ideas and prefer to keep things the way they are. A Harvard Business Review survey asked employees how often they had seen senior leaders challenge the status quo or encourage teams to think outside the box. A staggering 42 percent said never or almost never, and 32 percent said sometimes.
Various justifications are used to suppress fresh thinking. Have you ever made or heard such statements from your fellow leaders?
- That’s not the way we do things here
- You’re not being realistic
- It’s more complicated than you think
- We tried that before and it didn’t work
Why do leaders continue reinforce the status quo when it clearly fosters mediocrity and weakens the organisation? In the article, 5 Reasons Leaders Are Afraid To Challenge The Status Quo, Glenn Lopis highlights a few common causes:
- They’re unwilling to do the hard work that goes with holding themselves accountable – reaching out to others and finding out what they don’t know
- They don’t want to stick their necks out and take risks
- They think they know everything and don’t see the need for reinvention (especially true of senior leaders who’ve been around for a long time)
This is the thinking that all of us in the leadership team must work together to dismantle. We need to develop the habit of asking questions and finding out what’s happening at the cutting edge of our domains. We must cheer each other on to try new things – even if we fail. In fact, if we’re not failing at all, we’re doing something wrong – because failure is a necessary by-product of innovation. We need to remind ourselves that just because something has been working well for a few years doesn’t mean it will hold us in good stead forever.
Creating innovative ecosystems
At the 2015 Global Innovation Summit in California, USA, over 150 organisations filled out the “Rainforest Scorecard” – an assessment that measures innovation across six domains:
- Role models
- Frameworks, infrastructure and policies
- Activities and engagements
The resulting data suggested three key findings, described by Henry Doss in his Forbes article, Status Quo Leadership Is The Biggest Impediment To Innovation. Firstly, organisations that showed greater balance across all six domains were up to 50 percent more innovative than their unbalanced counterparts. In other words, successful innovation demands a holistic approach across the entire organisation, rather than ad-hoc measures.
The second finding highlights thenegative consequences of strong status quo leadership in an unbalanced system. As Doss points out:
One could argue that when seeking innovation, leadership is more often the problem, rather than the solution, and this notion could in turn lead to some important questions.
Finally, Doss explains that far more than resources, what drives innovation are role models and culture. Yes, adequate resource allocation is important – but it isn’t the key. In fact, the presence of strong role models attracts the correct amount of resources. The message, Doss says, is clear:
It is very difficult to buy innovation, but strong role models can influence innovation quickly, and with fewer resources than might be expected. Further, our analysis clearly shows that organizations that place more emphasis on resources than on role models consistently under-perform in the area of innovation. This seems to tell us that in the world of innovation, money is nice to have but role models are clearly better.
Stop maintaining the status quo
Essentially, disrupting the “maintenance mindset” requires being open to different approaches and fresh ideas:
1. How you run meetings
Something as simple as changing the way you run meetings can help. For example, instead of leading the discussion with what everyone already knows, make it a point to amplify outlying views, bold thinking, and dissenting opinions – all of which are core to innovation.
2. 24×3 rule
When you hear an idea for the first time, resist the knee-jerk urge to instantly squash it – instead, try the 24×3 rule. For just 24 seconds, suspend your disbelief and pessimism. Consider it as a real possibility and think about its potential advantages. Gradually work your way up to 24 minutes: ask yourself in what ways the new plan might be better than “the way we’ve always done things”. Your final aim should be to give yourself 24 hours to consider the promise of an idea before you start focusing on potential obstacles. Do away with the “mistakes are unacceptable” mindset. Support your team members in taking risks, and treat failure as a learning opportunity.
3. Invite unexpected developments and new information
Make it clear that you want to hear about unexpected developments and new information, even if you’re busy. In an interview with Innosight, Columbia Business School professor Rita McGrath explains that one of the worst things a leader can say to their team is “I don’t want any surprises”:
The problem with this leadership style is that you’re going to get “no surprises” until it’s too late. And you’re not going to have people bringing you things that they’re really worried about because they don’t know how to solve them.
4. Create small wins
In Effective Leadership: Rejecting the Status Quo, Timothy I. Thomas suggests making gradual adjustments rather than sweeping overnight changes. These are easier to implement and more effective in the long run. In case of extensive transformations, he recommends a strategy of creating small wins along the way:
If entire processes, practices, or organizational structures need to be overhauled, be sure to create small wins along the way to encourage employee motivation, keep people on target, and provide a sense of accomplishment.
As leaders, it falls to us to ensure that we don’t get stuck in the status quo, leaving our organisation vulnerable to competitors and external shocks. Remember – if we’re not getting better, we’re getting worse. As leaders, we need to have an open mind, the will and courage to drive change.
As always, I look forward to your thoughts.