Organizational Blind Spots

Updated: Jun 10, 2019



On average, 22 companies are added to or removed from the S&P 500 every year. More than one half the current S&P 500 companies were not part of it in 1999.


Of course, there are many reasons for the changes, but many formerly top-ranked companies have had severe blind spots that helped push them off the success path.

Professor Bettina Buchel at the IMD business school in Switzerland has researched the kind of blind spots that impact organizations. Think about how they might impact your business.


Blindness due to the Law of Belief (discussed in our Thinking Traps – Part 2.) Professor Buchel says that we do not “see” what is incongruent with our current beliefs and frame of reference. Circuit City was once one of Jim Collins’ success examples in his wonderful book Good to Great. But it did not see the holes in its strategy. Its leaders believed they were on the right track and, applying the confirmation bias, they were able to interpret market signals as supporting their strategy – all the way to their ultimate demise.


What to do about it?

Seek broad employee input. Find people who see different possibilities than you do. Cultivate their input, give them incentives to speak up rather than ostracize them for disagreeing with the current strategic direction. This is challenging; many people do not know how to appropriately express themselves in honest disagreement. You may need to teach your executives how to openly listen and the dissenters how to position their ideas so that people will listen.


Set up risk assessment teams that are charged with looking at current and potential strategies from many different frames (see our October 3rd blog on framing.)


Leaders need to help the organization get out of its comfort zone. Have everyone find new sources of information, and be certain every top executive is talking to customers about their unmet needs and desires. Be sure they understand their customers businesses, business models, value propositions, and strategic direction. You’ve got to try to see where your markets are going before everyone else does.


What a change it would have made if Motorola, Nokia, and Blackberry had better understood that cell phones were not going to be just phones in the future. If they had known that customers wanted to have devices with large powerful and beautiful screens. Devices that keep them connected to the internet, enable them to process work programs like PowerPoint and Word, to play music, use blue-tooth, take fantastic pictures and video, they wouldn’t have just made cell phones. They had the advantage but lost it almost completely to Apple and Samsung.


Some of the strategic ‘traps’ noted by Professor Buchel:

  1. Seeing what you expect to see – we don’t see what we don’t expect to see

  2. Misjudging industry boundaries – narrowly defining our industry based on current products and services

  3. Failing to identify emerging competition – we don’t see potential threats because they don’t do things the way we do or the way we expect

  4. Overemphasizing competitors’ visible competencies – we assume that competitors will continue doing what they do and how they do it

  5. Not questioning our own practices – we don’t question our current practices because they appear to work. We’re successful and will continue to be so.

#Leadership #Management

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