Published: MWorld, The Journal of the American Management Association
Change is not simply the watchword of our past. It has to be the watchword of our today and tomorrow as well! Our highly competitive, global marketplace demands savvy leaders keeping the change engine of business on track.
Heralding the necessity for organizational change is all well and good, yet how constructive is it when not backed up by action? Do you know how to drive the day-to-day operation of an organization to reflect this value?
Successful action emerges as organizations identify the two essential business tensions that will ensure profitability and its future. The first tension is an organization’s obligation to maintain Structural Stability. The second is the need to anticipate, champion, and nurture Purposeful Change.
Leaders who understand their responsibility within these dual tensions have one foot firmly planted in present-day reality, and one in future possibility. They have an eye on the day-to-day operations, always fine-tuning for continued profitability. They visualize what currently doesn’t exist, and advocate the funding of resources to build the foundation today for ‘tomorrow’s’ fulfillment. Each is fundamental for a healthy company. And it’s not enough to balance equally and precariously between the two; rather it is a strategic dance of choice.
All too often, leaders become blinded or complacent to the full scope of their responsibilities—spending more attention on one side of the equation than the other. Consider what happens when these tensions are mishandled.
If you are a leader engaged in a Structural Stability perspective, you would affirm a leadership style that is systematic, linear, rational, and incremental. Executives are thinking: “How can we improve the operation to earn more profit?” “What piece of the business isn’t making a profit or doesn’t match-up to our core competency, or is in a diminishing market that we should divest?” “Is there a way to restructure that will reduce costs yet provide us with the necessary support to get the job done?” “Is there new technology or processes that will advance the operation in becoming more efficient?”
These leaders are producing vital incremental modifications to improve performance, yet their focus is first and foremost on the structure that already exists.
Employees are evaluated on improvements, efficiencies and on-time deliverables. The management focus is on quality, quantity and completion. A review of the corporate budget will reveal a substantial share of resources apportioned to safeguarding and augmenting ‘what is.’ When stability is an exclusive focus, you squeeze out the ‘Big Idea!’ opportunities to reinvent and grow. In fact, you stifle the very future of the company you believe you’re enhancing.
Encyclopedia Britannica is a company that was fixated on maintenance. They were the preeminent reference book company in the world. They were so far ahead of their competition there truly wasn’t any. Their gilded reference books were marketed as a mandatory purchase by parents who wished to invest in their children’s future. The company’s door-to-door salesmen were the highest caliber. Encyclopedia Britannica’s future was rosy… right?
Well, we know it wasn’t. The company tumbled from its lofty perch. Why? Management so focused on their infrastructure—improving their reference material, their sales force results, the quality of their products, and their production processes—that they missed a little change in the wind of commerce when computer CDs and then the internet shook up the industry.
They focused on securing their Structural Stability with little attention spent on non-linear, new ideas, and reinvention. Leadership never saw ‘tomorrow’ rolling right over them until their market share disappeared along with their profits and their future.
Just this March after 244 years of publishing, Encyclopedia Britannica announced they were no longer printing books. They’re now entirely a digital company. Playing catch-up rarely wins back first place. So, as many other companies have discovered, it is probably “too little, too late” for Encyclopedia Britannica.
Conversely, if you’re a leader focused on Purposeful Change that adds value to the future of the organization, you might have thoughts such as, “We need to shake it up,” or “If it’s not broken—fix it anyway, or we’ll lose our market edge.” Corporations caught up in the future have a leadership thought process that is non-linear, intuitive, simultaneous, and synthesizing. Employees in this domain will be innovative, rule breaking, expanding the box thinkers. Your management focus will be on idea-generation and overall long-term success. And if you look at the budget, resources are allocated to R&D and future initiatives as efforts are made to gain competitive leverage for the future.
An organization exclusively caught up in the challenge of tomorrow, even with a great product or service base, rarely achieves corporate stability and profitability. An inferior infrastructure guarantees reduced profit margins and a system that will ultimately buckle under the weight of all the future “might-be” activities.
Remember Etoys, the internet company that was announced as the brightest e-commerce portal introduced to the marketplace since Amazon and Ebay? They spent a great deal of their attention and resources on Purposeful Change strategically crafting Etoys as the dominant online retailer of toys.
Then their infrastructure broke down leaving them unable to ship scores of Christmas orders until after the holidays! This delivery failure led to bad press… that led to lack of confidence from both their customers and investors… that led to bankruptcy!
Etoys didn’t go down without a fight. They attempted to shore up their infrastructure. However, it was ‘too little, too late!’
A sole focal point, as with Encyclopedia Britannica or Etoys, puts the company at risk. Leaders must recognize that a healthy tension between the need for both Structural Stability and Purposeful Change is essential—for without it organizations have little chance for a long-term, profitable future. It is the leader’s responsibility to anticipate and champion a strategic mission that appropriately nurtures both sides of these two indispensable business tensions with resources of money, time and people.
Businesses that don’t want to be combating their own “too little, too late”’ tribulations require leaders and a workforce who are comfortable with both maintaining a smooth, running operation and welcoming and initiating change—not just for today, but for the future as well!