Can established organisations really change?
Over the years many successful established organisations start to fall behind and some even disappear; Blockbuster, Quaker Oats, Blackberry to name a few. It is toxic to think that an organisation does not need to adapt to a changing market however still remain relevant and profitable. Granted some industries are more volatile than others however change is inevitable. It is just a matter of time. According to Prof. Richard Foster of Yale University the average lifespan of a leading S&P 500 company has decreased from 67 years in 1920’s to 15 years today. He predicted that by 2020 more than three quarters of the S&P 500 companies will be ones we have not even heard of yet and he was right.
I have worked with many teams across various industries that all started a journey of change. Each organisation I worked with had a variety of different reasons for wanting to change. However the underlying theme was the same, to survive. Many teams I worked with have successfully changed and have discovered new value for their customers and organisation. However not all succeed, but why?
Donald Sull, a writer for the Harvard Business Review (HBR) on organisational culture, believes it is not businesses “inability to take action but an inability to take appropriate action”. He believes the most common reasons for this is down to “active inertia”. I believe this active inertia is evident to the fact that in order to change trajectory an organisation, by definition its people, needs to foster a new mindset and be open to cycles of rethinking.
An entrepreneurial mindset
Do you approach your job the same way you would if it was your own business?
The majority of employees don’t and this limits an organisations ability to change if it’s people are not interested in making sure their are taking appropriate action. For those of you are entrepreneurially minded who work for organisations who do not foster and incentivise this mindset see more benefits in leaving and becoming self employed.
There is a massive rise in self employed workers, entrepreneurs and startups. According to Moya Mason there are about 300 million people worldwide trying to start about 150 million businesses. You do not need to have an established business model or product to disrupt the marketplace these days. In fact small lean businesses have the ability to pivot and move their product in the market given them more of an advantage. The availability of technology and the rise in poly skilled creative individuals allow people to leave established organisations and become self employed. People are creating startup businesses that are able to carry out cheap and effective experiments with a view to take advantage of the blind spots left by established organisations. Netflix vs Blockbuster in the movie rental market is a good example. Netflix a company founded by Reed Hastings based out of frustration for being charged late fees. If established organisations do not start to facilitate an environment where talented people can use their passion and energy to discover new ways to provide value to customers they will simply lose out on the opportunity and may even see themselves ultimately competing with former employees. What if Blockbuster hired Reed Hastings and encouraged his ideas? Would you be streaming your favourite movie tonight on Blockbuster?
This rise in the entrepreneurial mindset gives people the ability to pivot their direction quickly as a result of learning experiments in order to elicit the changing needs of their customers. People with this mindset generally pol skilled. Not only do they know how to build products using an experiemntal mindset with an emphasis on feedback and continious improvement, they also know how to run a business and thus can make better return on investment decisions. Image a product team where the Business Analysts, Developers and Experience Designers roles all having an appreciation of the product budget and what it would cost to build feature X vs the value feature X will provide. Perhaps even more thought provoking, what if the budget holders had a better idea on the need to experiment and pivot based on feedback form the market, would you still be planning years in advance with a fixed budget?
The hunger to succeed is what makes an entrepreneur successful. It is their ability to use failure to inform their approach and adapt to feedback. Intercom, a successful Irish startup attempted to build a million dollar startup within a startup. They funded their venture generously and allowed 3 months for a team to discover and build new features for one of its products. The finished product was a flop. Waved EL Miladi, a product engineer at Intercom concluded that the hunger that drives a real startup was missing especially when it is generously funded and conducted in a safe environment. This honestly is a compliment to Intercom’s success and its ability to adapt and refect realisictally on their environment. Granted fostering this mindset is not easy however it is also not impossible. It is becoming clear that even startups that are growing are experimenting on how to recreate their original success. Intercom’s honesty is a testament to that fact.
So, the question is, what is your company doing to employ, foster and operate with an entrepreneurial mindset throughout (top down, bottom up)? I nothing, are you aware of what this means to the future of your business? Are you the next Blackberry of your industry?
