Stagnate or innovate – the organisational sink or swim
A well- known phrase, ascribed to Albert Einstein, calls it insanity, to be doing the same thing over and over and expect different results. Leaving aside the philosophical debate of how well this phrase applies to human existence, it is safe to say that many organisations have taken it at face value – and failed.
The last few decades have seen the demise of long standing corporate giants such as Sears, or Blockbuster, not to mention hundreds and thousands of smaller companies and organizations, who counted, that sticking to a proven winning formula, would continue to produce them growth. They were wrong. As they stubbornly stuck by their existing operations, seeking growth in incremental innovation to improve them, others – like Amazon, Walmart or Netflix – did not hesitate to use their existing assets and capabilities, often the same which for so long have built the success of their rivals, to experiment with new business areas.
This is not to say that they haven’t sought to optimise their existing operations and reduce waste but, parallel to these efforts, they have led on initiatives which were risky, experimental and disruptive, but ultimately proved very worthwhile – like Netflix’s pursuit of, new at the time, technology of online streaming, while continuing its existing business in video and DVD rentals.
What did they have that others didn’t?
Leadership vs management
They had leaders who understood, that every business model only works for so long and, if growth is to continue, organisations need to adapt and innovate in an agile response to the needs of their environment – whether they’re being successful or not. The greatest fault of successful organisations is that they become stagnant – attached to what produced their success in the first place and averse to change.
In my experience, however, aversion to change isn’t the only problem. What often happens is that, whilst there is an understanding that change needs to happen, and perhaps even readiness for it, but there is often a lack of understanding about what is needed to make change happen and, in particular, that both a vision and a strategy are needed – or, in other words, leadership and management.
I have seen many examples where there would be one but not the other. There are organisations that introduce a change effort as a series of management steps, which rarely produce any clarity on what the direction of travel is. These steps, whilst they might improve efficiency or save money, will fail to produce long-term large-scale change – and ultimately, growth. Equally, although perhaps less commonly, there are great leaders with inspiring, bold visions, yet so out of touch with the realities of day-to-day operations and without a solid management plan to implement it, that the vision either fails or takes great hardship and sacrifice, often unnecessary, to even partly see it through.
A clear vision
Success needs leadership and management. And good leadership starts with a strong vision which looks beyond the horizon, while keeping the feet planted on the ground. An ambitious, yet realistic vision, builds on the leverage accumulated to date – the starting point of the journey – towards an end goal, which expands the current status quo to uncharted, yet reachable territories.
How do we build a vision like this?
Once again, there are common pitfalls in vision setting. There are those that are internally focused – looking at what resources, people and processes there are and what can be done with them (often relating to what’s been successfully done in the past as a way to justify this approach). These types of vision are geared towards the past. Then, there are those that are future oriented – bold and idealistic – but detached from the realities of making them happen.
In my view, the best visions are those that are customer obsessed.
They look not at what is already happening or what we want to happen from the point of view of the organisation itself, but at the people it is happening for and the impact it has on them. If we take our customers and the relationship we have with them as a starting point and look at ways to grow and expand – both the relationship and the customer base – then we build a vision which spans across the past, present and the future. A vision which, while aspirational, is also down to earth, as it is grounded in the reality of an existing commitment to an audience, which will continue to hold to account on what it has been promised and what it is given.
With this vision, and the mindset that developed it, it is easier to follow on with a strategic plan for improving and innovating for short and long- term gain.