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Adapting To A New Reality

It’s an inherent human condition to resist change. We don’t naturally seek out change. In the market, the firms that lean into change win. The leadership teams that embrace change and the fear of the unknown are considered great. Those leadership teams that aren’t afraid to “cannibalize” their market share and have a general “willingness” are considered innovative. Again, these are the management teams that win regardless of economic downturn, pandemic, or any other excuse obstacle for which they are confronted.

 

Great article in the September/October, HBR article, Adapt Your Business to the New Reality.

“AMONG LARGE FIRMS DOING BUSINESS DURING THE PAST FOUR ECONOMIC DOWNTURNS, 14% INCREASE BOTH SALES GROWTH RATE AND EBIT MARGIN”

Harvard Business Review, September-October 2020

First, I was struck by the stat above. 14% of leadership teams can adapt their strategy, thinking, processes, and business operations to grow double digits during a crisis. Amazing. Second, I thought, why does it take an economic downturn or pandemic to shock some leadership teams into rethinking their business model?

It’s an inherent human condition to resist change. We don’t naturally seek out change. In the market, the firms that lean into change win. The leadership teams that embrace change and the fear of the unknown are considered great. Those leadership teams that aren’t afraid to “cannibalize” their market share and have a general “willingness” are considered innovative. Again, these are the management teams that win regardless of economic downturn, pandemic, or any other excuse obstacle for which they are confronted.

Look at organizations like Apple or Amazon. Apple is making a transition from a pure hardware (Mac and iPhone) company to a services company. And they’re making this transition right before your eyes. Amazon isn’t an eCommerce company. They’re a cloud company, Amazon Web Services.

From my observation, their exponential growth is driven by the culture and philosophy their leadership teams take every day. They don’t wait to transform themselves out of necessity, rather an opportunity. They seek to reinvent themselves every day. It’s what we call this way of thinking shifting-the-demand curve. A process and philosophy to fundamentally build reinvention into your business model.

Key Takeaways from HBR:

  • Reassess Growth Opportunities and break your institutional habits

    • Know your data. Analyze it. Test your assumptions. And change.
    • Take the other side or perspective. Look at it from your competitors’ view.

  • Reconfigure your business model

    • Are there channel opportunities?
    • Are there adjacent markets you can enter? (or exit)
    • Can you shift your platforms? online vs. in-store or distribution vs. direct

  • Reallocate your capital. Move past your fears and double down on key bets

How do we get you started?  We find every organization is in a different stage of their journey.  Many don’t see the opportunity to change.  Some are trying to change.  And others, are changing, but it is creating chaos.  Call us for a conversation about where you might be and how our team can remove the barriers and ignite growth.

Thoughts expanded from the Harvard Business Review article, Adapt Your Business to the New Reality by Michael G. Jacobides and Martin Reeves
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