The life expectancy of the average company is becoming shorter by the year. Last year there were a record number of bankruptcies. This rapid changing of the guard is due to the fact that technology is evolving at an ever faster rate.
Not rethinking your business model and game plan is a very dangerous thing to do these days. Still, every week I hear loads of excuses from companies that don’t see how this is relevant to them.
Below I’ve listed the five most popular excuses. If you catch yourself or your company using them, think fast and correct your course.
1. Look at our results, we are very successful
This is probably the top answer. Executives with excellent financial results don’t see the need to rethink their business.
The truth is that rethinking your business is actually the most fun when you’re doing great. When your results fall short of expectations, the pressure to rethink your business can lead to a negative vibe.
The best time to think about the future is when things are going superbly well. Rethinking the future doesn’t mean changing all the good things in an organization. No, the goal is to anticipate changes in the market that may influence your business in the future. Proactive behavior may help you make some important strategic choices: making certain acquisitions or hiring specific talent are just two examples.
2. Our industry is conservative
‘Our clients don’t change that fast’. ‘Our competitors are the most boring companies in the world. They will never change, so we are safe’.
This line of reasoning is very dangerous because it implies change can only come from within the industry. The most recent models of business disruption originated outside the industry in question. When a good alternative presents itself, industries are often surprised how fast buyers are willing to adapt.
Who would have thought consumers would be so fast to switch to tablets or use Uber taxi services, Airbnb… Benchmark your company against the most successful companies in the world instead of merely looking to the most successful competitors in your sector.
3. We are not a technology company
Business disruption is not about technology; it is about new models of customer relationships.
Many of the newly successful companies figured out new ways of presenting themselves in their market. They use technology in a smart way, but the key point is often the amazing customer relationships they are able to establish.
Also, global digitization is impacting every sector now. If you’re not seeing it, open your eyes because it’s there.
4. We don’t have the structure to reinvent ourselves
Some companies feel the need to change, but they are afraid their current structure can’t handle it. This is true in many cases.
If you start by changing the company structure, the road ahead can be long and painful. That’s why I don’t think you should start by implementing structural changes.
First, you need to devise a strategy. Once your roadmap is finished you can take the necessary structural measures, not the other way round.
5. Cultivate a new company culture before making changes
The last argument I often hear is that the company’s culture is not ready for change. This is probably the most difficult problem to tackle.
Company culture is an intangible factor and changing it isn’t easy: a company’s culture changes because of new behavior and a new attitude within an organization. Like before, it’s a good idea to start by working on a path for the future.
Do small things differently and hire staff to suit the new philosophy. After a while, you will feel the wind of change. Don’t expect your company’s culture to change overnight because it won’t. Make small changes in how you think and act and a new culture will gradually develop.
I’ve tried to come up with a story to motivate companies to re-invent themselves. You can read the full story in these slides:
Have the courage to let go
Large companies are often afraid to lose what they have. As a result, they do everything in their power to protect their current source of revenue and their modus operandi. Logical but not without risk.
The music industry fought long and hard to safeguard its old organizational structure and the same is true of the travel industry. Most struggles to save old models have failed. History teaches that all major revolutions are won by the people and it’s always the masses that are responsible for far-reaching changes.
This also applies to the business world and the adoption of new business models. Regardless of a company’s success, you should always assume that today’s model may change tomorrow. A company’s survival depends on its willingness to let go. Darwinism is back and with a vengeance: the new Darwinism is much more fast-paced and often crops up unexpectedly.
The future will be different
The key message of this article is the fact that ‘past success is no guarantee of future success’. We are living in an age of rapid change. We owe it to our organizations to prepare for the future with every new dawn.
I wish you the best of luck on this fascinating journey.
This article was originally featured on the blog of Steven van Belleghem