Ask any business leader what their biggest constraint to progress is and they simply could not tell you rather they will tell you a host of issues holding things back. Their answer to the question represents the real constraint.
The biggest constraints in organizations is how the organizations deals with constraints. There is no one problem causing the constraints there is a series of inter-related problems. However, treating each problem, or solution, interdependent of each other is in fact the biggest constraint to progress. Oh you say, Companies don’t do that anymore. Really?
You don’t have to look very far to see companies chasing solutions that end up creating more problems than the original problem that the solutions were supposed to solve. The latest solutions being chased include all things labeled with “social, digital, innovative or next generation”. It is like the God’s of business wisdom concocted a new “social drink” and organizational leaders are standing in line waiting to drink from the fountains of transformation promised by wise men, and women, who came in with their disciples preaching a new social business gospel. The problem is the social gospel won’t save a company with the wrong beliefs.
The Wrong Beliefs Are The Biggest Constraint
Modern business leaders have a tough job. They have to create innovative products that delight customers. They have to adopt breakthrough technology. They need great marketing. They’ve got to manage complex supply chains. And they run in highly competitive global markets. And most of all they have executive management teams that are in charge of everything and everyone. They believe that kind of structure is good for the stockholders and the stakeholders. See the constraint yet?
The reason most companies can’t remove their biggest constraints is most executives, or the entire Board, are not likely to look in the mirror and say, “I am the constraint.” Thus the biggest constraint, a belief in a lie, remains and nothing changes because no one has the power to change anything until the company is being flushed down the toilet…J.C. Penny sound familiar?
You see, companies are run by people who believe certain things. Whether stated or not the belief systems of a company is that intangible thing that drives everything. In the United States most executives believe they are entitled to lead and their wisdom is what keeps the organization alive.
Beliefs create culture. Culture perpetuates human capital. Human capital enables creativity, value creation and strategic capital. Strategic capital fuels the possibilities that increase relationship capital with markets. Relationship capital is scaled with the right structural capital. Human, strategic, relationship and structural capital are all components of intangible capital. Such things are the things that create all the meaningful value in the 21st century. Most executives do not pay attention to these critical components. The winners in the 21st century do!.
Now, some management consultants love to talk about all sorts of neat concepts like competency, strategy, performance, vision, planning, effectiveness, core values, execution, company culture, and change management. They’ve got all sorts of jargon, buzz words, and management fads. However few, if any, will have the guts to tell the CEO that his/her beliefs are the biggest constraint to the organizations growth and prosperity.
I wonder if the big and even smaller consultant firms would dare say such a thing to the hand that feeds them.