Thursday, July 17, 2008

Why change?

Pathbreaking firms today aim to outperform their competitors in the following areas:

Environmental Clarity.
They see the competitive environment early and clearly. They look for elements that are missing and for patterns that can connect what’s already there in new ways.

They respond very quickly to what their customer’s need and want. They incorporate new technologies and new ideas into their products and services faster than the competition.

Flexibility and Agility.
They’re able to adapt simultaneously to many different business pressures and developments.

They continually generate new ideas and combine existing business elements, both
inside and outside the firm, to create new sources of value.

Quality and Consistency.
They produce products and services that unfailingly exceed their customer’s expectations.

To consistently excel in these areas, employees’ actions need to be informed by a clear vision of the firm’s purpose, priorities, operating philosophy and guiding principles. Similarly, vendors, contractors and business partners also need to share a common understanding of the future the firm is working to create.

An effective vision articulates a view of a realistic, credible, attractive future that’s better in some important ways than which currently exists. The leader’s role is to create this unity of direction by orchestrating a process of reflection, collaboration and joint discovery. Leaders learn what to change by looking out. They learn how to change by looking in.

Vision is a dangerous concept in a political context. Leaders have to declare their views publicly if they want others to support them and doing so paints a big bulls-eye on their back. Vision creates high visibility, high expectations and high accountability, which sets up opportunities for a career win - or a career loss. So, change leaders need plenty of air cover. If those above you aren’t suited up for the game, you need to be sure that at least they won’t blow the play dead.

Many companies approach change like the old man who lived in a house that had a leaky roof. Whenever it rained, he was very motivated to fix the roof but he couldn’t do anything about it because it was raining. However, once the weather improved, fixing the roof was no longer a priority.

Vision without action is a daydream; action without vision is a nightmare.

Are any of these statements (from Sydney Finkelstein’s book, Why Smart Executives Fail) an accurate depiction of how your company looks at its world? If so, be warned the risk of failure is high.

1. We've always used the same approach to how we do business - it‘s worked in the past, and it’ll continue to work in the future.

2. We’re too committed to our current plan to change direction at this time.

3. We have our customers figured out. We've known what they want for years.

4. There's one powerful champion driving our current strategy; the rest of the company just follows their lead.

5. We organize and run all our business units in the same way. If it ain't broke, don't fix it.

It's wise today to recall the German philosopher, Georg Wilhelm Friedrich Hegel, who said, “Was is Beakannst ist nicht erkannt” (That which is familiar is not known).

Next, we'll learn more about the second P, Pressure.

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