Change Your Game or Lose Your Game

More than 150 years ago,  in his classic treatise On the Origin of the Species, Charles Darwin wrote: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

A century and a half later,  that natural law is being played out in boardrooms and on shop floors from New York to New Delhi and Toronto to Tokyo. Around the world today, organizations of all types and sizes are finding out that there are really only two kinds of businesses: those that are changing their game and those that are, agonizingly or otherwise, going out of business.

If they ever existed, there’s no such thing as “immune” industries any more.  A partial list of broken industries that either didn’t heed the change-or-die message or are now fighting to figure out a way to survive the inevitability of that premise includes publishing (books and newspapers), entertainment (music and movies), walk-in retail, communications (cable and telephone), automotive, consumer goods, fashion and, of course, airlines and the travel business.

What has changed?  In a word: “everything”. Rapidly evolving technologies, national economies in transition worldwide, a slow and confused recovery from a series of financial disasters and bruised investor confidence all add up to a very scary business environment.

What hasn’t changed?  Business still clings to its increasingly obsolete approach to management. The ways people manage and get work done in organizations today are not that much different from how our grandparents did it back in the early 20thCentury. And those rigid, out-dated beliefs, models and tools are simply incapable of working effectively in times of vicious uncertainty, disruption, changing demographics and unexpected chance events.

Most leaders today have never developed a business model  for dealing with the current unpredictable and volatile world order. They are out of touch with threats to their business, delusional about their success, have flawed assumptions about competitive advantage and don’t understand risk. They devise strategies that have little chance of succeeding and don’t really know how to lead major change initiatives. In other words, they are continuing with old formulas that won’t work in the innovation economy.

That assessment has become increasingly obvious  in the current complex, unstable business environment. Apart from some theorists who do “get it,” according to the IBM Global CEO Survey report of 2011, 98 per cent of CEOs now say they need to “modify” their current business model and over 70 per cent say “extensive changes” are needed.

The solution lies not in embracing warmed-over theories  and practices formulated in earlier times when business success was more easily predicted, planned and managed. It now lies in radically changing the game.

How does one change the game  and who are the game changers most needed to get it done?

In business today, a game changer is a visionary strategist  who can alter the way business is done. He or she conceives a new way to win, doesn’t take success for granted and is unafraid to experiment or change course when circumstances warrant. A game changer is a catalyst who knows how to use innovation  to drive every element of the business, a breaker of the chains that constrain most organizations and a hard-headed realist who can bring clarity, focus and resilience to the enterprise.

The primary goal is to build resilience  – the ability to learn how to adapt. More than ever before, resilience is the one quality that determines success or failure. Curiously, it has always been thus and hence should surprise no one. It’s just that in today’s more rapidly paced and uncertain environment, the importance of strategically adapting to change, both positive and negative, is greater than ever before. How many companies have risen to the top through innovation – think Research In Motion, Nokia and AOL, among others – only to be thrown for a loop by changes in the competitive environment? A few leaders survive but many perish.

The greatest risk facing any organization  is not taking seriously the need to change. Yet most companies are simply not built to innovate. Sure, they talk about it a great deal – it’s part of corporate lore – but, when push comes to shove, the uncomfortable truth is that they prefer to fall back on business-as-usual practices. For many reasons, some perhaps valid, they rely on what worked yesterday.

The reality is that most business strategies are little more than goal-setting exercises.  But goals are not strategies. The annual top-down, cookie-cutter strategy development exercises practiced by companies today are enormously time consuming, expensive and flawed. Yet, for the most part, the results are ignored by those in the trenches. Studies show that 43 per cent of employees today can’t readily identify their firm’s strategy. Most businesses choose great words, post them for all to see and then fail spectacularly in living up to them.

Worst of all, most strategies as conceived can actually reduce  an organization’s peripheral vision and flexibility in adapting to complexity and uncertainty. They downplay the need for the type of creative risk-taking that effectively changes their game. Henry Ford got it right: “Failure is the opportunity to begin again more intelligently.” And Steve Jobs perfected Ford’s philosophy.

Businesses need to understand, develop and encourage people  who want to continually tinker with and occasionally completely overhaul the rules of their enterprise – within the organization, within its marketplace and in ways not previously contemplated. And this is a learnable competency ever business leader must master.

The objective is to nurture behaviours organization-wide  that result in increased productivity, competitiveness and profitability. Leaders do know what constitutes success – they see it reflected on the balance sheet and in growth, happy customers and productive, loyal employees. But they are also discovering painfully that “same old” just won’t cut it in the new world order.

It’s true that game changing invites failure.  But all learning is error driven. So the goal is intelligent failure. Because it’s also certain that not changing in today’s hyper-competitive world is the approach that guarantees failure. 

By making the conscious choice to stay the course and work within the models that presume stability, predictability and control, it will just be a matter of time before some kid in a garage somewhere puts you out of business with a customer-value proposition that is better, faster and cheaper. And the circle of life will go on.

This article was written for The Bottom Line and appeared in the May / 12 issue.