Monday, 14 January 2013

Strategy Risk: The Importance - Attention Matrix

One of the biggest strategy problems is to fail to pay attention to the right things.

If you map the relative importance of issues to your strategy against the relative amount of attention they receive in the organisation, as shown to the right, you get three outcomes:
  1. Risk arises where issues which are strategically important receive inadequate attention
  2. Waste arises where issues which are not strategically important receive too much attention
  3. Performance occurs where all aspects of your strategy receive the right amount of attention, be that a lot or a little.
Consider the situation encountered in many mature organisations. The accountants take over, and financial matters get more attention than they need (sometime resulting in financial over-engineering problems and financial risks). In the meantime, in those organisations, customer issues often get very little attention, even as the organisation's customers' start to look elsewhere, exposing the business to strategic risk.

On the other hand, in entrepreneurial startup organisations, the organisation often focuses overly much on customer related issues, with inadequate attention to financial issues, and so runs into cash flow or debt issues. Alternatively they fail to pay sufficient attention to process, and run into problems with scalability once the business takes off.

Part of a strategists role is draw people's attention to the right balance of what requires attention. Unfortunately this often means calling attention to future challenges while the present seems very rosy. This can lead to the Cassandra effect - where your attempts to look to what is important for the future are doomed to be ignored in favour of what is currently attracting attention. In these circumstances, careful stakeholder management is required to take key stakeholders on a journey from what they're currently paying attention to to what they should be paying attention to.