In 2018, CEOs face a myriad of dramatic challenges on every front: rising cyber security threats, costly healthcare, capital funding, the new administration’s evolving regulations, ever-more demanding customer expectations and the economy.
Internally business leaders must also address ongoing competition, market oversaturation, customer service and shareholder demands. Add to this are such new challenges as managing virtual workspace and the evolution of talent acquisition. Today it’s more than retaining and hiring employees based on qualifications, it’s about finding employees whose visions and values reflect your company – assuming those visions reflect a culture of innovation.
Recently IBM gathered 100 CEOs to discuss “big bets” on the future being made by companies. The Times article reporting the event said the majority of CEOs echoed a point that had been mentioned repeatedly in the last few years: the biggest problem they face is not technology, but creating a corporate culture that can embrace and adapt to new advances in technology.
The IBM gathering was one of several major meetings this year by leading CEOs to discuss what the future portends. Innovation and culture were the main themes framing the observation that companies can no longer assume they are too big or too successful to fail.
Lessons of Stagnant Leadership
Recent business history is littered with companies who thought size and category dominance made them immune to failure. Companies who didn’t see the need to adapt or respond fast enough to competitive challenges or market changes.
Kodak responded too slowly to increasing demand for digital photography – even though they had key patents for such technology – and in 2012 filed for bankruptcy.
In 2007, Apple introduced the iPhone, offering beautiful, touchscreen design and mobile Internet access. Blackberry was too slow to respond. By 2009 enterprise software company RIM, once the dominant leader, was now forever the follower.
Then there is the cautionary tale of Borders. In 2001 Borders outsourced online bookselling to Amazon, effectively throwing gas on the digital download fire. Borders flamed out in 2011.
Now, consider of the original Fortune 500 companies listed in 1955, only 87 exist today. It’s a history lesson that has taken on new import today: big or dominant-category brands are being displaced by more nimble companies that quickly adapt to the market — or create new ones.
But size is also a factor if that scope encompasses speed and agility. Amazon just rocked the retail world with the purchase of Whole Foods. As a recent Forbes Magazine article said, “This is more than just supermarkets, this impacts all of retail. With the economics they can offer online, Whole Foods may be where Amazon started, but it’s not likely where they’ll end.”
The lesson is not so much that the big eat the small, it’s that the fast eat the slow. The driving force behind all these stories is innovation that leads to transformation. The underlying message is that companies must create a culture committed to Darwin’s theory that the successful must adapt, adopt and evolve – or die.
Risk and Reward
The best way to anticipate the future is to create it. It’s what Netflix and Amazon are doing right now. Not every company can develop game-changing effects on such a big scale, but every CEO can try to create a fully engaged culture in which ideas that lead to innovation are encouraged and rewarded.
To stay ahead of the curve, successful leaders must seek continuous improvement to enhance current operations – while forever seeking and exploring the emerging and new opportunities. They can’t do it alone and they can’t be afraid of risk.
A recent Deloitte article put it this way, “CEOs need to display—and cultivate within their companies—an ability to use fear of the rapidly changing landscape to fuel more productive outcomes, and accept failure as a risk when placing big bets.”
Sam Walton of Walmart fame promoted a unique formula for success: “Ready, Fire, Aim.” This approach is based on two premises. First, failure was to be expected and accepted in the pursuit of innovation. Second, if you wait until everything is perfect to proceed, nothing will get done. In his book “Made in America”, Mr. Walton said he believed you learn as much from your mistakes and as your successes. Just don’t make the same mistake twice.
Be Open and Receptive to New Ideas
Often businesses can’t move forward because they’re stuck in the past. They face ever-growing and increasingly complex challenges with old infrastructure that hasn’t made any attempts to evolve. As a result, this stagnation impedes the ability think and act with progressive, agile ideas and solutions.
If your corporate culture isn’t molded to energize innovation or modeled to take full and fast advantage of such solutions, nothing you do will work. The future will not only pass you by, you could very well become another Blockbuster or Borders.
What’s more, stagnation also means it will be next to impossible to attract and retain the kind of employees who will bring innovation to your company. You can’t attract the right talent if you aren’t structured to take advantage of their skill sets.(Tweetable!)
Tomorrow the keys to the new kingdom are all about progressive action: Innovation that leads to transformation, continuously adapting and adopting emerging solutions that lead to robust evolution. If all this sounds hard, it is. If this article frightens you more than a little a bit, it should.
Companies can no longer promote innovations disguised as minor enhancements to products or services. The takeaway is that successful companies must periodically develop and implement performance transformations just to remain competitive.
Yet the reality is this: Innovation, transformation, and corporate evolution are just progressive sounding abstracts without a relevant and practical blueprint to proceed.
At StellaPop, our management consulting team has successfully supported and cultivated relationships with business leaders for more than a decade. Our first priority is powerful ideas, agile strategy and simplified process that translates into growth. Give us a shout, we’d be happy to hear about your company’s challenges.