In times of continuous change, there are both winners and losers. Some company’s grow to become high performing, innovative and competitive enterprises while others develop into fighters, fighting for survival on a daily basis.
Today’s business environment is constantly evolving, with many factors both internal and external to the organization affecting the achievement of its stated objectives including the level of its competitiveness compared to competitors.
Some of the contributing factors include prolonged geopolitical and economic uncertainty, unresolved trade issues, rapid advancement in technological innovation, increased competition from new market participants, and fickle customers with constantly evolving needs.
As a result, the business has to be adaptive if it is to grow and succeed in such a disruptive environment.
When everything is going well, it’s easy to focus more attention on the good stories and less on what could go wrong. The blue overshadows the red, and this is a major problem in some companies.
These companies allow their past success stories such as successful product launches, increased market share, core technologies, and other organizational capabilities to blind their ability to view the future with a different pair of eyes.
Culturally, they are locked into the old way of working, bound by legacy systems and processes. Little time is spent on reviewing and evaluating the existing business model to establish whether it is still viable or not in these disruptive times.
On the contrary, transformational companies are not satisfied with the status quo. They are appreciative of the fact that past success is not a guarantee of future success.
Just because you are doing well today doesn’t not mean you’re going to enjoy everlasting success.
Business history pages are littered with doom and gloom stories about companies that have collapsed due to lack of innovation and unwillingness to evolve with the market.
Examples of such companies include the technology company Xerox, the retailer JC Penney, the social networking company MySpace, the department store Sears, the high tech company Polaroid, the bookstore Borders, and Circuit City the consumer electronics company.
What do all these companies have in common? At some point in time, they were all mighty industry titans, too big to fail and led by great, smart people.
However, in the midst of their successes they failed to adapt to changing customer needs, new technologies, competition and business models.
Even though these companies had built their businesses from the ground to the top of their respective industries, their death knell was the self belief that no other company was capable of doing better than what they were already doing and unseat them at the top.
Unfortunately, because of this fallacious way of thinking and ignorance they all paid a hefty price.
To avoid having your company join this list of colossal business failures:
- Don’t get comfortable doing the right thing for too long. Continuously look for opportunities ahead and remember that today’s success can obscure tomorrow’s possible failures.
- Regularly ask yourselves if what you’re doing and how you’re doing it is enough. It’s about making productive use of the resources available to you to improve your company’s performance and competitiveness.
- Don’t dwell too much on the past. It’s important to know what has happened, but more importantly you need to understand why it has happened and how your company would perform in the future.
- Commit sufficient time to analyzing new technologies, industry trends and competitors. Reviewing financials provides a rearview mirror of business performance, and you need forward looking indicators to understand your customers, competitors and the competitive status of your business (in terms of products, core technologies, market share, talent, culture)
- Stay open minded. As highlighted above, when a company has been successful for too long, very little time is spent on thinking through alternative downside scenarios. It’s so easy to focus on the good news, spurn bad news and avoid discussing negatives. Questions such as “Why haven’t we done it before, What if this doesn’t work? What would we do then? What might make this not work?” are reluctantly answered. As a result, what begins as minor issues eventually develop into major issues. Don’t be a victim of own success to such an extent that you become ignorant of change.
Transforming a business into a high performing, innovative and competitive enterprise is a journey characterized by ups and downs. Consider every challenge, every problem and every piece of bad news as an opportunity to learn and improve.