A. Regard every belief as a hypothesis. The biggest barriers to strategic renewal are almost always top management’s unexamined beliefs. Music can only be sold on shiny discs? Don’t bet on it. The news has to be delivered on a big piece of flimsy paper? Not necessarily. You have to load programs onto your computer before you can use them? Maybe not. In an age of unprecedented change, it’s important to regard everything you believe about your company’s business model, its competitors and its customers as mere hypotheses, forever open to disconfirmation. Every industry works the way it does until it doesn’t; and if you don’t challenge industry dogma, you can be sure that some unconventional upstart will. So now more than ever, humility is a virtue.
B. Invest in genetic diversity. What’s true in nature is true in business—a lack of diversity limits the ability of a species to adapt and change. Problem is, the gene pool at the top of many companies is a stagnant pond. The executive committee is usually comprised of long serving veterans whose experiences and attitudes are more alike than different. Homogeneity has its virtues—it facilitates communication and speeds decision-making—but it also limits a company’s ability respond to unconventional threats and opportunities.
C. Encourage debate and dialectic thinking. Diversity is of little value if senior executives value conformance and alignment above all else. One of the reasons that McKinsey & Company* has remained at the top of the consulting game for so many decades is that it encourages internal dissent. It believes that vigorous debate improves the quality of decisions. Within any organization, it’s usually the malcontents and rebels who are the first to sense the impending demise of a much-loved business model, and the first see the value in wacky, new ideas. Yet these folks are often muzzled rather than encouraged to speak up. On every important issue managers need to ask their colleagues, “Where do I have this wrong? How do you see this differently? What would you do here?” These questions, asked repeatedly and honestly, can protect a company from the arrogance and nostalgia that so often stymies renewal.
– Gary Hamel