IF YOU ALWAYS DO WHAT YOU HAVE ALWAYS DONE …..

Most people do not want change; they just want things to get better.

The majority of people would like to have their life improve in some way; to have better health, better family relationships, better friends, a better job, a nicer living environment, be more loved, be slimmer, taller, better looking, less wrinkled, fitter and for most, to have more money.

But very few people seem to be prepared to accept that in order to successfully achieve anything in life, particularly in an ever-changing world, the first requirement is that they change something about what they are doing today.

Author: Felix Burton; CC BY 2.0 license; via Wikimedia Commons

Sir Winston Churchill (1874-1965) understood that “To improve is to change; to be perfect is to change often.”

The reality is that this desire to not have to change anything is also true of many companies, particularly during times of success. Strangely, this is true despite the fact that business history is littered with the corporate epitaphs of companies that believed that they didn’t need to change what they were doing, and that all they needed to do was to hope things would get better and then people would just buy more of their products and/or services.

I have two such examples from my own personal career history.

International Harvester (where I worked 1966-1973), who invented a large part of the farm equipment and machinery which is still used today, and who dominated their industry for decades, came to believe that their customers would stay loyal to them even if they stopped investing in R&D. They embarked on a major cost savings programme to improve profitability, and their customers deserted them in droves when smaller competitors appeared who could differentiate themselves, even in small ways, from the then giant.

Author: Joost J. Bakker; CC BY 2.0 license; via Wikimedia Commons

The same is true of Digital Equipment (where I worked from 1997-1984) who dominated large parts of the IT world with their range of minicomputers in the 1970s and 1980s. They would not accept that “people would want a computer on their desk or in the home”, despite the fact that the workstation revolution was happening all around them. (see “Hero to zero in the corner office” posted October 29, 2012).

Despite all the lessons available from history, I too often see this same sort of attitude today in some companies who appear to believe that their survival and success is now mainly dependant on them just being able to get through the current economic crisis. A belief that everything will return to “normal” when the crisis is over, and that this should happen fairly soon, as it has already been going on for 5 years since 2008, so can’t go on forever. Anyway the media do deliver to us the occasional hopeful sign.

Author: Slowking4; CC BY-SA 3.0 license; via Wikimedia Commons

However, I believe that this view that we are in a traditional crisis state, that has a beginning and an end, is a complete misunderstanding of the financial situation that the world is in today. I believe that we are going through a more fundamental shift in the economic environment, and that companies who cannot adjust to the new economic realities will not survive, in the same way that in the past we have seen companies die because they did not change to meet fundamental shifts in their industries. (see “Growing a new leg” posted June 20,2010).

In the Western economies we have built national, corporate and personal wealth on a belief in continual growth, and the availability of inexpensive capital to fund our drive for growth. Growth has been the major change agent for everything that was needed for success, and growth could disguise basic weaknesses in any structure whether at a country, corporate or personal level.

At a personal level, as long as we had a job, and our wages went up every year, we could build our future life on debt, as growth would guarantee our ability to manage it all and we could continue to survive and prosper.

Countries and companies were no different. Growth drove taxation to fund country administrations and citizen wealth, and hence loyalty, and growth drove companies’ profits to enable them to continue to drive growth, for business growth was the ultimate goal that forgave most sins and delivered success.

But today, in most countries, most industries and most companies there is neither the ready availability of inexpensive money nor economic growth, and I believe that those that are not fundamentally changing, but are just waiting for these to return, will continue to struggle for survival.

Author: Pictofigo; CC BY-SA 3.0 license; via Wikimedia Commons

Today, even if we want to stay the same, we have to make changes to be able to do so, because our only choice is to live within an environment that is driven and changed by others, or to make the changes that enable us to live within an environment that we have helped to create.

Companies that will survive this current revolutionary shift in business fundamentals will not only have to change the way that they manage their finances, but will have to change the way that they compete, find and keep their customers, satisfy their ecosystem, the way that they go to market and the way that they find, recruit, manage, motivate, reward and retain their people.

As is often attributed to Charles Darwin (1809-1892) “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

I have long believed that if you always do what you have always done, you will always get what you already have, but I have now come to believe that you will actually keep getting less and less.