A delegate, this past week, shared his love for computer games with the rest of the group – over the years, having spent well over US$ 7 000 on Play Station 3 (PS3) and associated games. He explained to all of us that some people enjoy hiking, others surfing, some watching movies – his “thing”, however, was computer games. He proudly mentioned that he had just acquired or put in an order for Play Station 4 (PS4) and was looking forward to its greater gaming capabilities and versatility – really excited by all the new possibilities, until another delegate mentioned that PS4 was not backward compatible, PS3 using 32 bit technology and PS4 using 64 bit technology. In other words, all the games that he had bought for PS3 could not be used on the new PS4 base – he would have to acquire new games designed for the 64 bit technology. His excitement seemed to evaporate in a second, until one of his colleagues suggested that the only solution was to have both technologies so that he could still play his most liked games. He might have to consider retaining his PS3 components as an option.

Companies, too, on occasion, find themselves at a place of strategic backward incompatibility. Their business successes have grown, they have a secure client base and are steadily developing their revenue streams and product ranges. Either through acquisition and subsequently having to fit now into a group strategy or a necessary shift in strategy to gain market share, these companies have to retain what they do well to serve their existing clients and also, simultaneously, make necessary shifts to start doing something new. The same challenge places huge stress on current management. While still keeping their eyes on “business as usual” activities, (PS3 focus), the same management team is expected to climb the leadership ladder and take staff with them to focus energy on the new strategy for the business (PS4 focus). For some, the paradigm shifts and subsequent new leadership requirements involved in this change may prove to be out of reach – perhaps these managers need to be confirmed in their current positions just to retain the status quo of serving existing clients. For the company to achieve the new strategy, however, an upgraded or new leadership needs to be appointed – this leadership has to refocus departments within the company to achieve new objectives, reapply energy to critical success areas and gain ownership amongst all staff towards the achievement of new goals. Tough choices need to be made by the company leader to have the right managers in place if new operational and sales targets are to be reached.

In order to deal positively with the inability of backward compatibility then, company leadership needs to:

  • Articulate the new strategy precisely – the “big picture” of what now needs to be achieved will need ongoing discussions and presentations in order for the way ahead to be understood by all involved. The ideas, goals and targets should be discussed interactively, preferably in workshop contexts, to involve all to get buy-in to the way ahead.
  • Appoint “PS4 leaders” in key strategic positions – the management team that has managed to get the company to its current position may not necessarily be the right people to take the company on its new journey. Different thinking is required to reach the stretch of the new targets.
  • Align departmental strategies to the new strategic direction – every department in the company needs to re-write their respective strategies to align to the newly adopted way ahead for the company. In other words, the nature of departmental involvement will change.
  • Ensure communication is enhanced and effective between all departmental managers – more than ever before, departmental leaders need to be speaking to each other to ensure that the necessary support for the new strategy is in place.
  • Set reachable milestones and keep progress towards achieving them visual – real-time milestone dashboards need to be created to keep staff focused.
  • Develop a culture around the new strategy – brand it, develop appropriate slogans that speak to it, alter key performance indicators to align to it and hold people accountable in relation to it.

Strategic backward incompatibility presents unique challenges, particularly for company leadership. To expect managers to cope with the demands of a new strategy with the same thinking that has been used to fulfil the requirements of the old strategy is not realistic. PS3 managers have to upgrade to PS4 managers if they still want to be a part of leadership within the new strategic context of the company. Backward incompatibility demands a positive and decisive approach from leadership if the targets of the new strategy are to be realised.

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