Anticipating and preparing for change is the essence of competitive advantage. While all leaders plan and communicate their strategy before the competition begins, it’s often necessary once in the race to make split-second decisions to redirect efforts.
Every business faces a future in which the only certainty is change: the rush of new technologies, increasingly demanding customers, changing values and skills of the workforce, and increasing complexity in the global marketplace.
Developing the mindset and ability to change is a formidable challenge. Organizations have established ways of doing things. Business flows in cycles: bulls follow bears; bears chase bulls. There is opportunity to enhance one’s competitive position in every phase of those cycles — but you must change rapidly.
You can feel the organizational pulse rate by the speed with which high-performance organizations commit to action, allocating and reallocating resources (time, talent, and capital) to pursue new opportunities. Decisions are made quickly, and vision is translated into action. People are recognized and rewarded for these practices.
However, as noted in significant research, many companies cannot seize opportunities prompted by change . They are so busy making the most of yesterday’s opportunities, they can’t see today’s or create tomorrow’s.
Many excellent companies have fallen from grace not because they ignored their customers or lacked exemplary management skills, but because business conditions shifted and they failed to adapt quickly.
With fluctuating markets, proliferating technologies, and changing political frontiers, the challenge is no longer to manage growth. Now managers must cope with sudden shifts in the rules of the game. Are you prepared? How will you handle sudden and radical changes in business conditions that create business discontinuities?
The pace and complexity of change will only increase in 2017. Time will compress, and windows of opportunity will narrow. Continuing change and dynamic pressures appear to be the only certainties for the future.
Changes can come from out of the blue. Traditional competencies or market niches can be challenged by new technologies, generating new skills and new products. We see:
- Faster research and development in technology, which speeds up product obsolescence.
- Faster competition, because a pioneer’s time advantage is shrinking, and fast-followers do not incur the high research and development costs that the innovator does.
- Faster market segmentation, because rather than the mass market of the past, we now have a rapidly changing society of many different groups.
- Faster market saturation, because the Internet, mass distribution, and mass communication speed up the creation and availability of new products and services.
How well organizations adapt to new conditions will determine who will survive and who will thrive. Those that succeed will meet the challenge, respond quickly and surely to new opportunities, and remain competitive in an era of accelerated change.
Capitalizing on Change
The 1990s were good to business — the wind was at the back of many who took full advantage of boom times. Then the good times stopped in the 2000s. Tailwinds turned to headwinds as the past years saw an unprecedented global economic meltdown.
Businesses of all kinds were adversely affected by slowing sales, falling volumes, and increasing pressures on the global economy. There was a continuing shakeout of companies that had expanded their operations in the boom markets. Market conditions became increasingly challenging.
Many key players hunkered down and just tried to hold on. Others simply withdrew from the business and redeployed assets in favor of more traditional services. Still others threw up their hands and went out of business.
However, the best companies and leaders used these cycles to build on their position. Despite the headwinds, or perhaps because of them, companies like Apple, Amazon, Ford, and Merck continued to position themselves for robust growth in market share and earnings.
While industry competitors were shifting into a defensive mode, trying hard not to lose, exceptional companies focused on playing offense, trying to win and even dominate.
The constant and unpredictable change in today’s business landscape can be either positive or unsettling, and it takes agile, flexible leadership to navigate these waters. Characteristics that should be avoided at all costs include skill-set obsolescence, turf struggles, inward focus, lack of innovation, and slow decision-making.
Companies at the leading edge clearly have plans. Their leaders accelerate efforts to select, develop, motivate, and mobilize high-performing teams. They know that a business rises and falls on the strength of its talent.
Most successful change begins with a business-driven sense of urgency — the recognition and identification of a compelling reason and the successful mobilization of change variables.
You either shape the future, or the future shapes you. You can choose how you will face change. You can lead or be led by change. You can dodge, resist, and avoid change while trying to survive, or you can anticipate, promote, and lead change to your advantage. Your success depends upon which path you choose.
Most companies wait too long to attempt transformations, doing so only when the signs of trouble have become glaringly obvious. However, in today’s business environment, that is likely too late. High performers, by contrast, change before they must, knowing the best way to change is from a position of strength.
They seem to sense which task merits the highest priority, seize the initiative, and devote enormous energy to finishing. They are dogged in their pursuit of goals, while maintaining the flexibility to change as the situation develops.
To win, you must not only anticipate change, but shape it. World-class competition provides people and companies with opportunities to exhibit extreme physical, emotional, intellectual, and psychological courage. Competitive events reflect a basic struggle — it’s survival of the fittest.
Don’t Wait. Anticipate.
Michael Winston has held executive positions for more than three decades in five Fortune 100 companies: Motorola, Merrill Lynch, McDonnell Douglas, Lockheed, and Countrywide. This article is an excerpt from his book, “World-Class Performance” (Dragon Tree Books, 2015).