What’s Your Corporate IQ?

Dr. Jim Underwood contends that Corporate IQ provides a “concrete, quantifiable method to rank companies within industries” (p. vii).[i]  Corporate IQ “measures the degree to which a firm is prepared to operate within and meet the challenges of its external environment” (p. vii).

So many “sacred cows” of strategic planning are slaughtered in this book—theories that focus on such things as core competencies or sustainable competitive advantage.  The author makes an argument that these concepts no longer apply since business is now so complex, and change is increasing at a faster and faster rate.

Your organization and mine must know of and respond to (and sometimes shape) our global environment and the creative, competitive actions of our opponents.  If our Corporate IQ does not match the Competitive Index of our industry—we will not produce above average financial results.

Yes, we need to continue to improve our existing competencies.  However, being the most efficient and effective buggy whip maker in 1910 did not keep the automobile industry from making the buggy whip irrelevant.

The author claims that in middle-of-the-road organizations, executives spend over 90% of their time on operational issues.  Whereas, in well-run companies, executives spend their time across three areas:

  • Maximizing what’s in the box (present mission)
  • Thinking and acting out of the box (present and future focus)
  • Staying ahead of the curve (knowing what’s coming and preparing for it)

The best leaders are the best thinkers.  Top leaders spend a great deal of time working “ON” their business rather just “IN” their business.

Ask yourself this question: “Do I spend most of my time working IN my business or ON my business?


[i] Underwood, J. (2004). What’s your corporate IQ? How the smartest companies learn * transform * lead.

Chicago: Dearborn Trade Pub.

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