Lexington, KY - "But Fred, don't you see how this market is shifting? The devices with NU technology will soon be the only ones consumers want. If we don't get it into our products as quickly as possible, we're going to be left breathing our competitor's exhaust."
"Listen Sally, you're overreacting. I've been in this business a long time and the consumers just don't adopt new technology that quickly. Let's just slow down a minute and catch our breath. If we change before the market's ready, we'll end up leaving a lot of money on the table that we could have gotten milking sales out of our existing products. Why kill a good business?"
This conversation highlights two common points of view. In one corner sit those witnessing a fundamental shift in the business environment, while those in the opposite corner either cannot see the changes, are in denial about them, or are unwilling to rock the boat and proclaim that the sky is falling. History is replete with catastrophes that could have been prevented if leaders had either been able to envision the change or see it and accept it, rather than deny it.
Let's look at an example. In June of 1973, Charley Maxwell, a 35-year-old oil analyst, flew to Detroit to meet with executives at Chrysler, Ford and General Motors. His message - the times of cheap oil are coming to an end. At Chrysler, he was able to meet with several high-level executives, but his message was not taken seriously. Ford ponied up a few junior-level executives with little power to meet with him. General Motors shuttled him off to the proving grounds to view some new cars. No one wanted to hear his ideas. Four short months later, in October 1973, the Arab oil embargo began and the price per barrel quadrupled from $3 to $12.
Psychological studies have shown that we often miss changes, especially if the change is out of context. While most of these studies are based on visual changes, I believe that we often miss changes even in the face of extensive analysis.
I see several reasons for these failures: inability to see the change, denial that the change may be coming, an aversion to risk and an unwillingness to move against the flow. As history has shown, any of these maladies can strike powerful - and even fatal - blows to a business.
Often individuals within an organization are able to see and understand change that may be taking place. If the change may cause major disruptions in the organization, including a loss of power, those with a strong power base may be reluctant to embrace the possibility of change and ignore it or work against it.
A popular method of reducing the likelihood of change blindness is the use of scenarios in the strategic planning process. Scenario analysis provides a structured method for organizations to explore a wide gamut of possibilities in many realms, such as technology, demographics, culture, economics and more.
Each scenario is built on "business as usual" criteria, as well as possibilities of broad scope that may have drastic ramifications for the business. After several important scenarios are created and refined, goals and actions can be set in place. Frequent reviews should be conducted to monitor events and adjust goals and actions if necessary.
Once you have determined that changes are necessary, the work begins to implement the change in your organization. This is actually the harder part. Research has shown several elements are necessary to implement change.
First, workers must be shown that the need to change exists. Facts communicated in person, on videos, in e-mails, and in printed displays can illustrate reasons for the change. Anecdotal evidence in the form of stories are the most common and effective means of creating a new culture embracing the change.
You must show how the changes will correct the problem and how you will be able to carry out the changes. This creates a sense of comfort that your proposed actions will fix the problem and that you are capable of making the changes.
Finally, you must continually reaffirm organizational support for the changes and show your team members how they will benefit. As you reinforce support for the changes, point out specific actions that have taken place or are in process. This provides a sense of comfort, showing that you are serious about carrying through the process and that early adopters who step out on a limb will not get chopped off in the process.
We are just beginning to pull out of a deep and lengthy recession. The global business environment has forever changed in many ways. Have you taken a fresh look at what your competitors might be doing? What competitive challenges is the new global economy tossing your way? Is there any new technology that may pose a threat or provide an opportunity for you? Now is the perfect time to assess the strategic landscape around your organization and prepare yourself for new opportunities as they arise.
Joel DiGirolamo heads the firm Turbocharged Leadership and can be found on the web at www.turbochargedleadership.com.