BUILT TO LAST MEANS BUILT TO CHANGE

Last week I promised to focus on tactical excellence in this week’s article.??However, a good friend shared an article that emphasized that while “‘Built to Last’ might have been a popular mantra, ‘Build to Adapt’ could be the way to go.”

I however see no conflict between building to last and building to adapt.??In fact, in the case of organizations, I believe that the only way to survive, to last, is to adapt.??As I noted in last week’s article, what does not change is the core, the set of timeless core values and purpose (reason for being) that remain constant over time.

However, visionary companies also have a relentless drive for progress—change, improvement, innovation, and renewal.??Enduring organizations understand the difference between their core values (which almost never change), and operating strategies and cultural practices (which endlessly adapt to a changing world).

TO BE BUILT TO LAST, YOU MUST BE BUILT TO CHANGE.

The article referred to above, entitled The Bridge on the River Choluteca, by Prakash Iyer appeared in BW Business World.??You can find the full article at the following link:?https://www.businessworld.in/article/The-Bridge-on-the-River-Choluteca/23-08-2020-311912/?.??Here is an excerpt from the article:

“Have you heard of the Choluteca Bridge? I hadn’t either, until not so long ago. It’s a 484-metre-long bridge over the river Choluteca in Honduras, in Central America. A region notorious for storms and hurricanes.

So when they decided to build a new bridge over river Choluteca in 1996, they wanted to ensure it would withstand the extreme weather conditions. A Japanese firm was contracted and they built a solid bridge, designed to withstand the powerful forces of nature. The new Choluteca bridge - a modern-day marvel of design and engineering was thrown open to the public in 1998. And as people drove from one side of the Choluteca river to the other, they couldn’t help but admire the new bridge. It was Choluteca’s pride and joy.

And in October that year, Hurricane Mitch hit Honduras. There was 75 inches of rain in four days – the equivalent of what they receive in six months. There was devastation all around. The river Choluteca swelled and flooded the entire region. 7000 people lost their lives.?All the bridges in Honduras were destroyed. All, except one. The new Choluteca bridge remained unaffected.

But there was a problem. While the bridge was intact, the road leading to it and the road leaving it were both swept away. Leaving no sign that there was once a road there. And that’s not all. The flooding forced the river Choluteca to change course. It created a new channel, and the river now flowed beside the bridge. Not under, but beside the bridge. So while the bridge was strong enough to survive the hurricane, it became a bridge over nothing. A bridge to nowhere.”

This is an excellent metaphor for how suddenly the world around us can change and affect us in ways that we may not have thought about.

This is why Jim Collins advocates the practice of productive paranoia to keep us on our toes.??As I noted in a previous article, no one can reliably and consistently predict future events.??Therefore, you need to prepare ahead of time, all the time, for the unpredictable.??Plan, based on the assumption that you can be blindsided by a series of calamities, even while you hope for the best.??Remember that it’s what you do before the storm that matters most in determining whether you thrive, survive or meet your demise.

In the case of the Choluteca, we need to ask whether the designers understood that the bridge was part of a system and that it was as strong as its weakest link—the roads leading to and from it.??Also, the river itself.??Could they have predicted the 100-year flood???Could they have invested in infrastructure to shore up the road and its foundations???Did they see the bridge as only one part of an integrated transport system?

REMEMBER THAT IT’S WHAT YOU DO BEFORE THE STORM THAT MATTERS MOST IN DETERMINING WHETHER YOU THRIVE, SURVIVE OR MEET YOUR DEMISE.

As you think about the Choluteca, consider your organization.

• What are your strengths?
• Do you have excellent IT systems and loyal customers?
• Where are your weak links?
• Do your people understand their purpose?
• Are your processes operating at their full potential?
• Where can you improve?

Then, consider the threats that may be around the corner or even ten miles away.

• How is the technology changing?
• How are the problems that you solve for your customer changing?
• Are new solutions being developed?
• How has Covid-19 accelerated these trends?
• How has Teams and Zoom made things better or worse?

And more importantly:

• How do you respond?
• How do you innovate and adapt?

INNOVATION

Jim Collins in “BE 2.0 (Beyond Entrepreneurship 2.0).” notes that “there’s no shortage of good ideas”.??He says the biggest problem is not stimulating creativity, it’s how to nurture the creativity that abounds all around us, and how to get that creativity acted upon and turned into innovations.??He believes that enduring great companies must have the ability to innovate continually, and he identified six basic elements every innovative company needs:

1. Receptivity to ideas from everywhere
2. “Being” the customer
3. Experimentation and mistakes
4. People being creative
5. Autonomy and decentralization
6. Rewards

RECEPTIVITY TO IDEAS FROM EVERYWHERE

Jim notes that “highly innovative companies don’t necessarily generate more ideas than their less innovative counterparts,?they are more receptive to ideas—and not only to their own ideas but to ideas from everywhere.??Furthermore, they do something about the ideas.??The first element in making your company creative and innovative is to seek ideas from everywhere and, most important, to?create a climate of receptivity to new ideas. Let us reemphasize:

There is no shortage of good ideas; there is only a lack of receptivity to ideas.

So, are you receptive to new ideas???Do you look for ways to improve on ideas that are brought to you???Would your response to the following ideas shared by Collins have been any different?

• The Telephone: “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
• FEDEX: “The concept is interesting and well formed, but in order to earn better than a ‘C,’ the idea must be feasible.”
• NIKE’s “waffle” shoe: “We don’t tell you how to coach, so don’t tell us how to make shoes.”
• The Personal Computer: “Hey, we don’t need you.??You haven’t got through college yet.”
• Walmart’s discount retailing concept: They couldn’t see the philosophy.
• The Beatles: “We don’t like their sound and guitar music is on the way out.”
• National Cash Register (NCR) Corporation’s John Henry Patterson:??Ridiculed by his business friends for paying $6,500 for the rights to the cash register—a product with “limited” or no potential.
• CT Scanner: “What’s all this computer nonsense you’re trying to bring into medicine???I’ve got no confidence at all in computers, and I want nothing whatsoever to do with them.”

Next week we will look at the other elements necessary for continual innovation.

Have a disciplined week as you work to build your financial freedom.??If you find this advice helpful, please share with your friends and colleagues.??As usual, I look forward to your questions and comments.??Be safe.??Take good care, and if you can, help someone in need.

Cheers, Nigel

Nigel Romano, Partner, Moore Trinidad & Tobago, Chartered Accountants