In my book, The GOSPEL of Strategy, I mentioned the three internal factors you need to consider when assessing your strategic options. They are namely:
The existing capabilities of your company;
Your company’s capacity for change; and
The key levers in your company.
(read the relevant section here)
One of the strangest things I have observed in business is that people often ignore the company’s capacity for change.
How familiar is this scenario to you:
The CEO hires the consulting firm.
The consultants recommend a transformation program towards some sexy and hot business models, e.g.,
From a brick-and-mortar retailer to an omnichannel retailer.
From a traditional manufacturing company to a digital manufacturing company.
From a conventional banking company to a fintech 2.0 banking company.
This recommendation is solely based on what’s popular – completely ignoring the existing core competence of the company.
Worse, because the new business model requires new core competence, the consultants prescribe new capabilities for the company. Unfortunately, the consultants forgot to consider the company’s capacity for change. As a result, the existing people must completely change their skills and behavior within a short time.
After 12-18 months, the transformation program fails because people cannot change that quickly. Many launched transformation initiatives are partially completed, while the full potential isn’t realized. Most people go back to the old way of doing things.
The consultants then blame the company for the failed delivery. But they had already pocketed their million-dollars fees long before the entire program collapsed.
The CEO then, to avoid embarrassment, choose not to recognize the failure. Instead, he/she spins whatever positive story salvageable from the transformation program.
Essentially, millions of dollars of shareholders’ money are wasted for nothing except for the misery of people working in the company (having to undergo a painful transformation program).
It is time for us to recognize that an organization doesn’t have an unlimited capacity for change.
If we look at nature, things are much simpler:
Dogs bark. Cats meow. Fishes swim. Birds fly. Other than a few exceptions, this is how the world works.
If we try to get our cats to bark, we’ll expend much energy and still be disappointed.
Furthermore, our cats aren’t going to be very happy about it. Imagine if you were the “cat” and felt bad/ashamed because you couldn’t bark, as if something were “wrong” with you. Forced transformations could only lead to unnecessary stress and mental health issues.
Photo from Unsplash.com
In strategy, we need to consider the principle of minimum effort/the path of least resistance. The Taoist scholars call this concept Wu Wei.
Your company will achieve better results if you stop trying to make cats bark.
If you want animals that bark, then get dogs.
If you want to keep your cats, find ways to use meows instead of barks.
Your people will thank you (no misery). Your shareholders will be happy (no wasted money). And you will have more peace seeing the positive results (no failed transformation program).
The only exception to this principle is if you have dogs who don’t know how to bark yet. Then, you can try to make them bark (as the capacity for change is there).
Stop making things complicated by expecting absurd results. Things are simple in strategy (although not always easy).
Continue to explore the secret of winning strategy here.
Comments