Reinvention is key to business sustainability
We all know about the fallen empire Nokia. Not that long ago, it was the world’s dominant and pace-setting mobile-phone maker with the most durable and high-tech phones available. Its presence in the market was so strong that no other brand could come even close to its market share. However, the giant fell to ground zero after the arrival of Samsung and Apple.
What went wrong?
The answer is simple: it failed at reinvention and ended up being a victim of major market disruption. Its key products and services were pre-empted by unexpected market entrants who had completely altered the definition of success in the value chain it was originally a part of.
Moreover, it did not understand its customers’ needs and kept banking on its outdated belief — built on the Symbian operating system in this case — which no longer did what customers felt they should be able to do with their phones. So, when Apple and Samsung came along with innovative and highly attractive user interfaces in smartphones that customers had never seen before, the same customers who were once diehard consumers of Nokia did not think twice about switching to competitor brands.
Now, some might argue that Nokia has always been an adaptive organisation moving in and out of many different businesses — paper, electricity and rubber galoshes were all part of its colourful history — but the bigger problem is that it stuck to past success; hence, it was too rigid and too established. Perhaps the real culprit was the leadership, or lack thereof, within the organisation.
For an organisation to be able to truly transform and reinvent itself, it will require visionary leadership that is willing to completely rethink the business — both the business model and the supporting corporate culture — at the right time. When talking about the right time, I’m referring to the time before the organisation gets into trouble, not during, or after, when resources are scarce and fear is contagious.
Still, as a leader myself, I also know how difficult it is to decide to cannibalise existing activities at what appears to be their moment of peak success. This is partly because success often gives rise to a mindset that craves a stable environment not open to change, but this could potentially paralyse organisations.
Change is, in fact, hard but as leaders we need to be assured that whatever has brought us here today will not necessarily make us successful going forward. We need to constantly remind ourselves to keep the best of the past and change everything else that is necessary in order to move forward and reinvent. That means we need to fix the roof while the sun is shining because when change happens, whether it is cyclical or structural, the rain will be coming down hard and fast.
In this new age of disruption, the nature of competition has completely changed. You may have seen the acronym VUCA — Volatility, Uncertainty, Complexity and Ambiguity — first coined by the US military to describe the extreme challenges in Iraq and Afghanistan. Today it’s used by businesses to describe an environment in which competitors from other industries can emerge and disrupt your long-established presence in a matter of months, when everything can soon be automated and most 9-to-5 jobs will expire naturally. Consequently, reinvention should be and must become a key and fundamental business mindset for all leaders and executives.
In other words, the most critical foundation for any organisation that aspires to reinvent is for the leaders to commit to personal reinvention — make the first move and set the trend for your people to follow. Disruptive or reinvention-agile leaders are those who are both willing and able to seek out, accept, diligently explore while quickly adapting to unforeseen uncertainties within their industry and market.
To become reinvention-agile leaders, you can start by not telling people to “keep calm and carry on”, because the moment you’re keeping calm, others have already advanced and overtaken your position. Instead, tell them the truth, empathise with their teams, involve them in their thinking and take them all on the journey. The truth can sometimes be painful but it’s often the shock of such truth that nudges people into taking action.
Then, get comfortable with failure. When change is the new normal, there’s nothing we can do except to get comfortable with those uncertainties and urge our teams to try more and fail more, fail fast and fail cheaply. This is because if you’re not failing, you’re not innovating and reinventing enough for the near future.
Simply put, in today’s ever-changing world, disruption is here to stay and it means your business model can either be leap-frogged or turned on its head in a matter of days. If you wish to stay relevant, reinvention is your lifeline to business sustainability.