There are companies that have managed to achieve long term success because they adapt to continually changing circumstances while maintaining the ability to execute brilliantly. General Electric, IBM and Johnson & Johnson come to mind. A more recent example is Microsoft, although the jury may still be out on that one.
These companies have an ability to consistently reinvent themselves in the face of changing competitive demands. IBM started out as an adding machine company and eventually became the premier mainframe computer manufacturer. Now it has become basically an information technology services provider. While GE is still an industrial conglomerate, it has also managed to diversify successfully into financial services.
The key is that they internalize the dynamic creativity of the marketplace. They have their eyes open for change, and then they have the processes and leadership to transform these into opportunities. Even more important though, is that they have found a way to hedge their bets without necessarily betting the farm, all while maintaining ongoing businesses and operations.
I would like to propose a process for adapting and innovating in the face of change and that can be summarized in four steps. This process is based on the decision-action cycle that the military uses to understand its situation and environment and then to decide and act.
Once implementation is underway, the performance measures and critical conditions can be used to measure progress and success. This launches a new sequence of the decision-action cycle as management observes the results of previous action in order to determine further threats or opportunities.
This is but a brief overview of an approach for building an adaptive and innovative organization. While it is essential that the senior management of a company master these skills, it is also critical that they be present at all levels of the organization. Not all adaptation and change leadership needs to be strategic. Small changes can be very beneficial in terms of increased profitability, innovation at the margins, and a sense of participation by all the firm's contributors.Back to newsletters