Strategy in a world of constant change
Business is becoming ever more complex and according to several major studies less than half the global CEO population feel their organisations are able and prepared to handle the level of complexity they are facing – let alone the level they expect to face in the future.
Many industries have had some tough years with recession, increased competition, changing consumer behavior, rapidly shifting technologies and emerging disruptive business models.
What does it take to respond to these challenges?
True transformation starts with a deep understanding of the severity of the problem.
There are still some executives who are waiting for things to return to “normal.” It’s not going to happen. Constant change is the new normal. Success now requires not just doing it better, but mastering the ability to do it differently.
If you don’t recognize the severity of the problem, it’s easy to fool yourself into thinking you are making progress when you really aren’t, or to convince yourself that all you have to do is wait for the economy to bounce back and your company will bounce back as well.
Transformation requires being outside-in, not inside-out.
Transformation requires a relentless outside-in focus. That focus should first be applied to identifying opportunities for growth. Then companies need to determine which of their capabilities they can borrow to seize that opportunity, which new capabilities they need to create, and which capabilities exist on the open market to be acquired or sourced through some kind of partnership.
In an interview with Innosight, Jeff Bezos from Amazon summed up this point nicely:
It is much easier for us, and I suspect for many companies, to start with your skills and work outwards. But that doesn’t allow you to do certain kinds of things. If you want to really continually revitalize the service you provide the customer you can’t stop at what are we good at. You have to ask what do our customers need and want. And no matter how hard it is, you better get good at those things
More agile and robust
Why can some companies take advantage of any change the market brings, while others struggle with the even the smallest internal or market-necessitated modification? The reasons why will differ for each organization, but the question is definitely worth asking – especially in light of the fact that the pace of change is accelerating at the fastest rate in recorded history.
Many of the new changes and occurrences are both new and difficult to forecast which was not the case in the past, so businesses have to become more agile and robust to be able to succeed in the new environment. This too will become normal.
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Constant change the new normal — http://www.torbenrick.eu/t/r/rkv
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WOW a lot said. Is change a constant I believe it is and always has been. We change most times out of necessity and not in most cases proactively. In todays world both the amount and aggressiveness of competition, as well as, the ability of consumers to be more informed and make comparisons makes winning business and keeping it a daily adventure. Any competitive advantage is short lived as competitor react and reinvent. Consider the impact of ITunes to the music industry and now the emerging impact of Goggles and others “radio music” stealing market from ITunes. The online readers are having the same impact on bookstores. When you can carry hundreds of books on a device that comes with its own reading light the utility to consumers is huge.
At the root of this phenomenon is technology and mastering it is essential to enable your organization to compete, or at least keep up. The world is now becoming one huge marketplace. Technology wipes out the advantage proximity once provided and speeds deployment. Yes chance is a constant and those organizations unable to master it will cease to exist -it happens everyday (Blackberry, the list goes on)!
Thanks for some great comments Stephen. Have a nice week-end.
Torben, you are certainly right. I believe that digital transformation is the biggest driver for constant change these days. It takes an agile organization to respond – or better to be in the driver seat. Most incumbents and large players are rather following than being true innovation leaders. That´s a shame but also the source of disruption and a way-in for start-ups and little one-product companies. I believe that we will see far more partnering in the future although I believe from own experience that a partnership between a large multinational and a start up usually does not work- except if they create adequate structures for the cooperation.