Why change at all? It seems like a nonsensical question, doesn’t it? If you or your organization isn’t evolving — innovating, growing, or reinventing —you are in danger of failing.
BY FAISAL HOQUE
Astrophysicist and author Carl Sagan once said, “Extinction is the rule. Survival is the exception.”
The global landscape is littered with the remains of organizations that rose to great heights only to have their fortunes plummet because they were unable to transform themselves as times changed.
Digital Equipment Corporation and Wang Computers, once the titans of the nascent information age, failed to innovate and were sold off to other companies. Woolworth’s, once a fixture on Main Streets across the country, did not adapt its business model to the advent of mega shopping malls and big-box retailers and closed its doors in December 2008. Pan Am and TWA, once the standard bearers of the U.S. airline industry, could not overcome economic pressures and were forced to declare bankruptcy. Transformation was the imperative they all had missed out on.
With the rapid change of the social-technology-economic climate, transformation is the greatest leadership and management challenge of our times.
And no industry is immune to waves of change. The automotive and energy industries are racing to find the next stage of their evolution in a world that is challenged by the question of accessibility to oil in the face of global market demands.
The media is grappling with the democratization of information resulting from the Internet, which has completely eroded the business models of film studios, music producers, and print publishers. The financial services industry tries to recover from the chaos resulting from bad risk taking and regulatory oversight failures, failures so bad that deep intervention by the U.S. government was needed, forever transforming banking, stock trading, and investment regulations.
Disruption and Transformation Is Nothing New
At the beginning of each new business era, the existing paradigm resists with vigor.
Sooner or later almost every organization needs to transform or diversify from their original market intent. Consider the following examples:
- Raytheon started as a consumer appliance company that made radio tubes. Today, it’s one of the largest defense contractors in the world, and makes microwave communications systems and cruise missiles.
- AT&T started out as a telephone network operator, but through evolving markets and regulatory mandates transformed itself into a global provider of Internet carrier services.
- Sony began as a recording equipment company; today it’s one of the largest media companies in the world.
- General Electric was founded as an electricity generator and producer of lighting components to create the power industry. But over its 132-year history, it has continually challenged itself to innovate and has produced everything from light bulbs to jet engines.
As economic conditions change and products reach market saturation, transformation is the only option for maintaining growth and financial viability. The difference between successful and extinct companies is the recognition and successful execution of this transformative process. Embarking on a transformation is more than just deciding to do something different or expanding into adjacent markets. It requires examination, planning, and execution.
To be successful in today’s business climate, most enterprises need to transform themselves on a regular basis.
The Way Forward
I have found that the organizations looking to establish an on-going transformative process should prepare themselves by considering the following seven principles:
1: Establish the business purpose of each investment. Is it to enable growth, maintain, or manage risk?
2: Determine whether the metrics you use have changed along with modifications in business, processes and/or technology.
3: Agree upon metrics that show how your organization creates go-forward options. This will ultimately lead to metrics that accurately measure business value.
4: Understand the economic environment and how your organization adjusts its strategy to changes in the environment.
5: Create management capabilities that support prioritization, consolidation, and standardization to manage and define the requirements needed in support of a collaborative culture.
6: Translate the business strategy into tactical plans for short-term and long-term value creation.
7: Instill in teams the behaviors and values that will lead to the best use of information for customer, supplier, and partner relationships.
Transformation is not a singular event. A one-time makeover will not cut it. Growth through innovation must become part of any organization’s soul. Successful, sustained organizations are those that are continually transforming themselves, or have segmented themselves to enable overlapping transformative initiatives that allows them to escape economic disruptions.
This requires new organizational thinking, the creation and sharing of new kinds of information, and new processes for creativity and innovation. Only in this way can growth through innovation become repeatable.
Copyright © 2017 by Faisal Hoque. All rights reserved.
[Featured Image: Unsplash User: Fabrizio Verrecchia]
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