Some of you might know the story. Revenue is stable or rising, market share good as never before, your company is the leader of your respective segment. Shareholders are content and the board pleased with quarterly results. Some middle class managers or even one or two C – level execs suggest changes in the business model and point out facts and processes that are obsolete, but the general consensus is that there is no need to change anything as all is working well. Don’t fix what isn’t broken.
Sometime later (might be a mere few years) the situation is very different. Sales figures are dropping, market share declining and new competition attained the rank of market leader. Suddenly, there is high demand for innovations and growth initiatives, but the whole process till final execution takes too long to make a difference.
Result is very well written by Scott Anthony: “One of the most frequent challenges we observe in the field is that companies tend to radically underestimate the threat that disruptive change poses to their business.”
Now it is easy to say that the board should have listen to voices calling for action when there was time, but true is that at the time of success’s peak it is difficult to recognize patterns that can lead to disruptive change and decline of one’s business.
There are many ways how to avoid this kind of situation but work only when the company realizes that disruptive change is threatening its future. This is a crucial point as a disruptive change is rarely visible until it’s already there, what is often quite late to respond. Part of the problem is that some executives rather deny even the possibility that the company’s golden age could come to an end.
One way that has the potential to counter effects of disruptive changes is thinking and acting like the “golden age” is already over. Simple but effective, this way you will have the time and even resources to fund and develop initiatives and changes that will innovate your products / services and continuously increase your competitive potential.
Here are some simple steps to start such a process:
First and above all you need to allocate resources for this kind of initiative. Creating a distinct group for innovations, reserving some time in your existing organisation, creating a competence centre … the choice is up to you, but you need to make sure that there is time and money to fund it.
Create a spirit driving new ideas. Innovations or ideas for improvement will not emerge out of nowhere, but have to be created by people. People will not usually start to be creative just because the company announced a rally for innovations. This kind of spirit needs to be strongly announced and continuously supported by all levels of management. Reviews, boards of fame, financial awards, promotions … all this are tool to boost and promote the spirit of innovation.
Do not dismiss new concepts or ideas that are not “conform” with your company’s current strategy. Rather do the opposite, support all kind of weird and strange thoughts (think about it as out-of-the-box ideas) … as this is exactly what you are looking for – ideas and things that will flame customer’s interest, bring new (and high margin) products on the market and shoot you sky high on the market’s share.
Thinking ahead and improving your company’s competitive potential is the key to avoid or reduce damage taken by disruptive changes. To be blinded by the now-a-day’s success could prove to be a fatal mistake.