Why Most Companies Suck At Change
It has been ten years since the iPhone was launched and the focus has been the 1 billion units sold ever since and how it upended entire industries and humbled giants of business. However, there is one super significant change that Steve Jobs engineered and it is not the iPhone. The most important thing he managed to do was to get his employees and customers to see the future, competition and the very purpose of Apple with new eyes. This is a much more challenging feat as compared to the launch of the iPhone. It required not just transformation but transfiguration of the entire mindset, purpose and business model of Apple.
Many companies talk about change, but few are willing to tempt fate and take on a systemic approach to making it happen. Change is hard and as humans, we are creatures of habit, and this applies to work as well. If delivering excellent service at your restaurant has been fulfilling and defined your existence then certainly it will be very hard for you to even consider that great service alone is not enough.
Many companies talk about change, but few are willing to tempt fate and take on a systemic approach to making it happen.
Unfortunately for change to succeed, it will require leaders to admit that even though they may be the best-in-class, it may no longer be enough in this day and age. This was what Steve Jobs was able to do. He knew that even though Apple made the best personal computers, has the best user-experience and product designs, these was not enough. He understood deeply that the rules of the market has changed and he was willing to confront that reality. However, this is what most companies are not prepared to do.
Many companies prefer to hold on to the fact that there is still a lot of good in what they are doing. So they do touch-ups, try to launch a small product or campaign to test the reaction of the market while maintaining status quo in terms of their overall offering. Then they hope that things will turn around or pray that the new disruptive competitor will lose steam and simply fade away. Nokia and Kodak made this choice and fell by the wayside.
Then there are others who think that all they need to do, is to make the customers happier, so they try to redesign the service experience. But this will be in vain because if the core product, as in, its very purpose and role is actually in doubt or becoming irrelevant then you need to adopt a more substantive approach to change. For example, some banks and insurance companies are trying to survive by merely transforming their service experiences but fail to see that they are now at an existential crisis on the role of banking and insurance. And if these banks and insurance companies continue on this selective approach then they are simply accelerating their demise.
Before every change exercise and whenever we present our 360 insights after reviewing a company's business, organizational and brand model, we show this chart to remind clients of the truth that most companies do not succeed or do well in transformation. It is a somber reminder of the challenges in the process.
Most companies are used to implementing Class 3 and Class 2 type of change. Class 1 is rare because it requires an enlightened leadership who can tell that the road is coming to an end and decides to take action. Because by the time a crisis strikes, as in the case of Nokia, it would be too late.
Class 3 and Class 2 type of change tends to be easier because you can adopt trends that you can already see. Your peers or competitors may already be adopting some practices and so it is easier for you to justify by simply following. In the case of Class 1, taking a whole-of-company transfiguration approach is tough because how do you justify change when there is no crisis, no roadmap to follow and your company is doing ok. Therefore the quality and type of leaders, the way the culture nurtures readiness for change matters.
Few companies have the rare track record of GE and P&G, surviving and transfiguring themselves many times through different industrial revolutions and periods. Nothing is guaranteed for sure, but one thing is clear. In another 100 years, only a few companies will survive and you can be sure that those who survived are in the Class 1 category. The rest will go like others before. It is the nature of business and the only guarantee is to remain enlightened, adapt to reinvent and thrive in this new age.
About Lawrence Chong
Lawrence regularly shares about the experiences of helping companies transform to enable innovation through purpose and unity. His passion is in shaping purpose-driven companies that will contribute to shaping a better world.
He is the Co-founder and CEO of Consulus, an innovation consultancy with business management and multi-disciplinary design capabilities. Lawrence is a featured speaker at global events such as World Marketing Summit and World Brand Congress. He served as the Immediate Past President of Design Business Chamber Singapore. His thoughts on innovation and creativity appear in regional media such as Business Insider, Business Times, Marketing Magazine, Newsbase, TheEdge , Prestige Magazine, VTC10. In his personal capacity, he is a member of the Focolare, a movement in favor of building a united world through dialogue, economics, and politics.
About Consulus
Consulus is a global innovation consultancy with business management and multi-disciplinary creative capabilities. Since 2004, the firm has helped companies, governments and non-profit groups achieve sustainable profit and growth by redesigning their organisations, business models and brand experiences based on the firm's method of unity. The company's competitive advantage comes from the insights gleaned from reviewing companies in 18 cities throughout the Asia Pacific regarding their business and organizational models. Read about the PurposeCore programme if your organization is looking for an effective transformation to meet the complex challenges of the 21st century. Read about PlaceCORE if you are a government or a developer seeking an innovative solution to redesign cities or a place for success. Consulus is a member of the Economy of Communion
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Consulus is the convener for Shape the World Conference, a creative thought-leadership event aimed at providing design-led strategies to inspire companies to innovate and shape the world. In 2013, Consulus launched the World Company Day initiative to inspire companies to shape the world creatively into a better place through daily work.
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