Young Ingvar Kamprad used unexpected cash from his father – a gift for good exam results – to found IKEA. He lived near furniture makers so reacted by selling furniture. He reacted to a boycott from local rivals by producing his own furniture.

Kamprad’s first designer reacted to not being able to fit a table in a car by creating the first flat pack. Then Kamprad reacted to his showroom burning down by building a huge replacement. He reacted to excessive customer demand by starting self-service.The IKEA strategy came from clever reactions to great unplanned opportunities.

Unplanned opportunities may be your best chance of creating a great strategy so you need to be constantly looking for them. Evidence supports the idea that the most successful entrepreneurs and leaders are fantastic at noticing opportunities. And the greatest opportunities come from reactions to unplanned events.

Does this problem let us start again and do it better?

What can we do today that was impossible yesterday?

Is our plan still working? How can we take advantage of events?

Any fool can produce a plan. The genius is in seeing how new events open up new possibilities for the old plan. Or even entirely new plans that weren’t possible when the old plan was written.

The planner is continually sifting through events for evidence about how well the plan is working. He wants to see new opportunities for achieving his objectives. Or new objectives that were previously impossible.

Most corporations have an annual planning cycle. They spend some time (usually not enough!) thinking about what they want to achieve. They produce a document that lists a series of objectives, priorities, and even tasks. The moment the plan is printed it is viewed as complete.

Some people follow the plan. They pretend (or believe) that it’s perfect. Some managers insist the plan is followed as a point of principle. The plan demands a response from senior executives, senior managers, managers, and professionals. Every level of the hierarchy produces their own version of the master plan – sometimes the process takes nearly a year of cascaded documents!

So it’s worth asking a few questions:

What happens when the assumptions in the plan are wrong?

How do employees challenge the assumptions in the plan?

By the time the planning is complete, will the plan already be out-of-date?

Other people ignore the plan. They don’t read it. And they certainly don’t think it has anything to do with the day to day of their job. They may react to events but the way that they react to events seldom changes. They understand the limitations of plans – the contradictions, the ignorance and lack of specific detail. They don’t understand the power of plans to shape responses to events.

The danger is following the plan too slavishly (without responding to events) will lead the company efficiently in the wrong direction. The right plan can be made wrong by events. The danger of not following any plan is that actions are out of step with each other, may stop any plan working or fail to improve the impact of everyone working together.

It’s difficult for some people to accept that reacting (not just planning) is a good thing. Managers have been taught the value of being (or looking!) organised. They have learned that being ‘proactive’ is what the business world wants. They have been told that being reactive is a bad thing.

The good news is that openly discussing the benefits of reacting and the limits of planning is healthy for the business. There is something for everyone in the idea. It can bring together those who believe all plans work and those who believe that the day to day is all that matters. Both are right. And wrong.

Another practical challenge is making room for both kinds of strategy in the formal ways that your team or company is organised. Strategy is more effective if it is adapted throughout the year. Some of this is adjustment in the way that the strategy is executed. Individual managers and colleagues figure out how to react to circumstances in order to deliver the official plan.

But some changes to objectives, plans, and direction benefit from being brought back into the formal strategy. It’s a way of acknowledging that has changed. It’s a method for encouraging effort to be focused on new opportunities. It can reduce the negative impact of too many alternative approaches. And it’s a lot more effective than simply planning, closing your eyes, and waiting for the results at the end of the year! You’ll know that you’re getting better at reacting (not just planning) when you find that some of the greatest achievements of the past year were not part of the plan at the start of the year.

Your approach to planning will be more fluid. You will include options for moving in other directions if circumstances change. You will examine what if scenarios while planning. You will become smart and fast enough to recognise a fantastic new opportunity (or an awful new threat) while there is time to react intelligently. And use them to better achieve your ambitions.

You will make ‘fire-fighting’ part of your strategy. And you will include more of the people who do the reacting on a day to day basis. Middle managers, supervisors, and people working at the front line – they can all help to recognise a need for clever reactions to real world events and circumstances.

Careful though because reactions to situations can be counterproductive. Unplanned actions can work against the strategy. People can make ad hoc decisions that make sense to them but not to the bigger picture. Or many unplanned actions can make sense individually but not together. The point here is not to encourage excessive chaos. Instead you want channelled initiative and creativity

Jay Galbraith describes the “reconfigurable organization” and argues that this type of organization must be able to reconfigure itself by forming teams and networks across organizational departments. As organizations continue to globalize, this ability to form partnerships becomes more and more complex. Galbraith also wrote that “the long-term human resources role is to build social capital by creating richly connected interpersonal networks across the organization.” Strong social networks within organizations can be a valuable competitive advantage in organizations and HR leaders are perfectly poised to ensure those networks remain strong. They are the people department after all.

This social power is especially important as Millennials continue to infiltrate workplaces. Millennials utilize technology with ease, and regularly engage and connect with their social networks. Thirty Percent of Millennials write openly about themselves online (Accenture, 2010), and I suspect that percentage is higher in 2012 than it was in 2010. The technology is a means to connect to them, not the actual connection itself. Most are unable to fathom life without these social networks: real or virtual. They were raised in a world where social media allowed them the freedom to interact with anyone they wanted to, and where the quality of a person’s ideas determines a person’s status, not their job title. They fundamentally believe that digital assets and knowledge are free. Other generations merely wish to believe this. HR leaders must learn to ride these trends, not just attempt to regulate them. Truly effective HR leaders will use these networks to the organization’s advantage, and increase its overall effectiveness by doing so.

Accenture. (2010). Jumping the boundaries of corporate IT: Accenture global research on Millennials’ use of technology. Retrieved from link.

Galbraith, J. (2000). Designing the global corporation. San Francisco: Jossey-Bass.

This is part One of a series I will be doing this summer on leadership by and from HR.

Tim Vanderpyl is a Certified Human Resource Professional (CHRP) with Canada’s largest catholic healthcare organization. He holds a Master of Arts in Leadership from Trinity Western University and is working toward a Doctorate in Strategic Leadership at Regent University.

Happy Friday

While they also have research backing up their claims, Davenport and Manville make this case through twelve case studies divided into 4 sections. Part One covers participative problem solving with cases from NASA to McKinsey & Co. Part Two considers the use of technology and analytics to aid decision making with cases EMC and the Charlotte-Mecklenberg School System. Part Three examines how organizational culture and power structures guide decision making with cases from EMC, Vanguard and ancient Athens. Part Four asserts the all leaders ought involve the entire organization with cases from Media General and the fascinating start-up TweezerMan.

We ultimately tend to rewrite organizational decisions as attributable to one man or woman. Judgment Calls argues that all decisions are made better by considering the knowledge present in the organization. In making that argument, they ensure that at least these twelve stories will not be rewritten.

A picture is worth a thousand words; clichéd but true. This illustration may also become clichéd, but whenever I see it, I grin and nod. Although the Promised Land lies within that magic circle, most of us can’t break out of our comfort zone. Recently, the Apple Corporation has shown the world a glorious example of how big business creates magic. No doubt, many CEOs will try to replicate the principles that catapulted Apple to the most valuable company on the face of the earth. Will they be able to do it?

One thing is certain; the place to start is the corporate culture. Magic can’t happen in cultures that don’t worship innovation. Innovation starts with leadership. Leaders must encourage creativity and teamwork, as well as processes and systems that nurture the concepts and execute the results. Most big company cultures are not innovative. Oh yes, they talk about innovation in their annual reports and their mission statements. But this isn’t the Apple, Google or Amazon type of innovation.

Take a look at your organization. How many of these traits are evident? If the answer is “not many”, then your CEO has a whack of work to do because this is the culture that moves companies from the comfort zone to the magic zone.

1. Inaction is frowned upon. Innovators don’t put ideas before committees or tolerate whining about not enough resources such as staffing, data or funding.
2. Fire, Ready, Aim is the mantra. I’m not suggesting you bet the farm on a big idea. Give the innovation your best shot now, in a “measured bite” rather than waiting months for all the information that might reduce risk.
3. Failure is lauded. Be proud of giving novel initiatives a try. “What did you learn along the way? How will you make it better next time? When will that be? And by the way, what can I do to help?”
4. Every innovation is applauded. Celebrations are held for anyone who has found a better way to get the job done. That includes receptionists, loading dock workers and accounting clerks.
5. Successful innovations are corporate folklore. We know this goes on at Apple — employees are still talking about Woz. There isn’t a better way to impress potential hires than telling the story of how Max, Chris and Marion . . .
6. The leaders have track records of innovation success. These are the people who stimulate innovation and permeate the culture to every nook and cranny of the company.
7. The organization reeks of pride. Product displays, success stories are everywhere – on the walls, in the newsletters, online in social media.

Until the new economy, big business wasn’t expected to innovate. Innovation was the way of the entrepreneur. The giant’s power, expressed in market or balance sheet clout gave them a ticket to pass go, and most have taken the easy way out. They’ve acquired, beaten smaller players into submission and expanded, geographically. But now, in Apple, Google and Amazon we have examples of innovation at such staggering levels that I suspect investors will demand more of big conventionalists. In highly concentrated industries, leaders will no longer have the luxury of acquisition to drive growth. The pressure will be on them to “stop minding the store” and “start building new stores.” Now.

The strategy book is divided into two main sections. The first is McKeown’s take on the important steps of strategy, starting with strategic thinking and moving forward to planning. The Strategy Book goes beyond simple planning models of picking a market position. While it covers this, there are also hat tips to emergent strategy thought leaders by warning organizations to stay flexible. The second half of the book offers a survey of strategy tools, starting with SWOT and including everything from Porter’s Five Forces to BCG’s growth share matrix.

It would be hyperbole to claim that McKeown’s The Strategy Book is the “know all, be all” of strategy. However, it’s not an understatement to claim that it may be the best starting point for learning to lead strategic.

Recent research led by Crystal Hoyt, however, has brought a new perspective to the debate. Hoyt’s team sought to examine the impact of each belief on ones ability to identify with a leadership role model and act in line with that identification. The researchers divided participants into two groups, one group was primed to believe that leaders were born and the other was primed to believe that leaders were made. Each group was then shown a leadership role model and tasked with completing a leadership task (delivering a speech to a group of followers). The research found that those in the “made” category were more likely to identify with their role model and demonstrated more confidence and less anxiety before performing the task. The “made” group also performed the task significantly better.

The implications from this research add another layer to our understanding of just how irrelevant the debate is. The evidence implies that it doesn’t really matter whether leaders are born or made, what matters is whether a person believes that they can develop into an effective leader, or improve their leadership ability. These implications suggest that, in leadership development, perhaps we should start by teaching this growth mindset and letting future leaders know that no matter how much nature gave them, nurture can take them a lot further.

David Burkus is the editor of LeaderLab. He writes, speaks, and serves on the faculty of management at Oral Roberts University’s College of Business.

Nothing has been as illuminating as studying the ways and means of Apple. More recently, I delved into the business of “cult” energy drink brands, Red Bull and Monster, and I strongly advise anyone in consumer products or services to examine Red Bull’s strategies and culture. Do that and you can’t help but think differently about your own brand or business. The folks at Red Bull are the ultimate entrepreneurs; although you may be caught in the bureaucracy of an old economy organization, you cannot escape the fact that great ideas create change.

Your idea can change a company. That idea can also change you; believe me, there is nothing like a business breakthrough to set the right foundation for the rest of your career. Take the time to look at other industries. You’ll be surprised what you can learn and how that information can affect your own business or industry. A trade show is a great place to start.

15 months of blogging and here’s the most important things I’ve taught:

1. Complexity in a company is a cancer. Keep it simple. Focus.
2. Strategy has never been more important. With the pace of business and with so many options at a leader’s disposal, clarity of purpose is critical to differentiating you from the rest of the pack. Leverage it to get ahead. Remain focused on it to stay ahead.
3. Creativity is the last great bargain in business. Institutionalize it within your modus operandi and mindset. This is difficult for big company people because they are part of a “spend your way out of it” culture. Creativity is the key to a small company’s success. With the emergence of social media, the leverage of creativity is immeasurable.
4. Appreciate that culture is the strategy. Look at Apple – no question Apple would not be what it is today without Steve Jobs ‘vision and tenacity. But don’t over look the fact that Apple’s culture is innovative, competitive, focused, passionate and collaborative.
5. Look to a future beyond the fiscal year. Develop strategies that define the future based on the actions
   you will take to achieve that vision.

43 years in business and here’s the most important things I’ve learned:

1. Life is a journey, not a destination. I didn’t get this until I left the corner office and began to discover interests beyond business. Don’t wait that long.
2. One can successfully balance work life and home life. Hug your kids. They grow up faster than you can imagine. Sure, there are times where you’ll have to put in the long hours. But you can work smarter. That means more hours for your family and your out-of-work passions. Trust me; the business won’t suffer.
3. Today’s business is more exciting than ever before. Okay, so there are roadblocks – government meddling, environmental challenges, cheap foreign production. But look at the opportunities – online marketing, social media, niche products and services, specialization, the list goes on.
4. “Greed is good” is becoming “greed for good”. Entrepreneurs invest where there is opportunity. Saving the planet is good business.  In the renewable energy market, global investment has increased from $33 billion in 2004 to $211 billion, 7 years later.
5. The most important thing in business and life is to love what you do. This means following your passion. Mine was marketing. Now that I’m out of business, my passion is writing. One day I’ll find a publisher not afraid to take a chance on a grey-haired, rookie novelist.

John Bell is a strategy consultant and former CEO of Jacobs Suchard (Kraft, Nabob). He is a contributor to Fortune magazine and a regular blogger at CEO Afterlife.

Montgomery argues that strategy ought to be an act of leadership, and not the formulaic calculation it currently appears to be. She argues that sustainable strategy is a myth and that true strategists and leaders work on constantly shaping and cultivating their companies value proposition and purpose over a longer time frame. To add to her argument she brings in fascinating case studies such as Domenico De Sole’s incredible turnaround of Gucci and (yes it seems obligatory) Steve Jobs’ triumphant return, which left Apple better aligned with the direction of the consumer market.

Montgomery’s style is a beautiful blend of academic prose and practical lessons. At first glance, the book looks like dry, heavy stuff however it moves quickly and keeps you feeling positive and entertained. There are many books about strategy out there, and many more about leadership – however, The Strategist has done the body of literature a service by finally blending the two in a comprehensive, yet understandable manner.