Your company has to be able to recognize Strategic Inflection Points, defined by Andy Grove of Intel as “a time in the life of a business when its fundamentals are about to change.” Banks had to make changes with the advent of automated teller machines (ATMs), and major airlines have to make changes with the new competitors coming from low-fare airlines.
Jack Welch at GE admonished his people: “DYB: Destroy your business. ... Change or die. When the rate of change inside the company is exceeded by the rate of change outside the company, the end is near.”
Tom Peters’ advice: “To meet the demands of the fast-changing competitive scene, we must simply learn to love change as much as we hated it in the past.”
I have noticed that American and European business people respond differently to change. Europeans see it as posing a threat. Many Americans see it as presenting opportunities.
The companies that fear change most are many of today’s leading companies. As incumbents, they have invested so much in their present tangible assets that they tend to either ignore or fight the insurgents. Because they are big, they think they are built to last.
But being big is no guarantee against becoming irrelevant, as Kmart, A&P, and Western Union discovered. If companies don’t want to be left behind, they must anticipate change and lead change. The ability to change faster than your competitors amounts to a competitive advantage.
Richard D’Aveni, the author of Hypercompetitive Rivalries, observed: “In the end, there will be just two kinds of firms: those who disrupt their markets and those who don’t survive the assault.”
But how do you change a company? How do you get your employees to adopt a new mind-set and give up their comfortable activities and learn new ones? Clearly top management must develop a new compelling vision and mission whose benefits for the various stakeholders appear far greater than the risk and cost of change. Top management must gather support and apply internal marketing to produce change in the organization.
The best defense in the face of change is to create a company that thrives on change. The company would see change as normal rather than as an interruption of the normal. And it would attract people who have positive attitudes toward change.
It would institute open discussions of policy, strategy, tactics, and organization. The worst thing is to be a company that dislikes change. Such a company will attract people who dislike change, and the end is inevitable.
As Reinhold Niebuhr stated: “God, give us grace to accept with serenity the things that cannot be changed, courage to change the things that should be changed, and the wisdom to distinguish the one from the other.”