Embrace Change or Be Left Behind

Embrace Change or Be Left Behind

Warwick Fairfax

September 9, 2019

Change is not easy, which is a major challenge for us because we live in a world that is forever changing.  Technology is changing. The market is changing. The culture is changing.  Not only is everything around us changing, but it seems that change is happening at an ever-increasing rate.

What makes change difficult for most of us is that human beings yearn for the familiar, so, in a sense, we yearn for things to stay the same.  We are caught between a desire to grow and the fear of the disruption change will cause.  For many of us, it leads us to stick our heads in the sand and try to let change pass us by while we cling to what we know.

One type of disruptive change is highlighted in Harvard Business School Professor Clayton Christensen’s book, The Innovator’s Dilemma, first published more than 20 years ago.  Christensen highlights how smaller companies with fewer resources are able to successfully challenge incumbent businesses with more at their disposal.  While incumbent businesses serve the needs of their existing profitable customers, the entrant companies target newer customer needs with different functionality, often at a lower price.

One classic example is Toyota.  Toyota entered the U.S. market in the 1960s with a cheap car for people who could not afford the models the big three U.S. automakers (General Motors, Ford, and Chrysler) made.  Initially, Toyota did not compete with the Big Three head on, but after building a following, it gradually made more expensive cars, including the upmarket brand Lexus.

Another great example is Kodak.  In the late 1970s, Kodak owned around 90 percent of the photography market.  But with the advent of digital photography around 2000, Kodak’s dominance slid until the company filed for bankruptcy in 2012.  What is remarkable is that Kodak had patents for digital photography but did not utilize them.  Why?  While Kodak knew digital photography would one day have an impact, it was reluctant to sacrifice revenue it was enjoying in the present.

A business I grew up in, newspapers, is another example of the challenge of embracing change.  For years there was talk of the threat and the opportunity of digital versions of newspapers.  While most major newspapers currently have both print and online versions, they have largely lost their chief revenue stream. Newspaper revenues from advertising used to predominantly be from classifieds (real estate, automotive, employment). That is not the case today.  In many instances, newspapers failed to  launch robust online classified advertising, ceding the market to other companies.

The common thread in all these examples? It is hard to embrace change and sacrifice current profitability for future opportunity.

As a leader you have a choice.  You can embrace change, or you can put your head in the sand and somehow hope to avoid the tidal wave that might be coming towards you.

The key to keep from winding up all wet when the wave inevitably hits is to change your perspective.  Turn an impending challenge (or crisis) into an opportunity.  Rather than being fearful or complacent, embrace the challenge.  Change is inevitable, so why try to avoid it?

So, what are the keys to embracing change?

1. Don’t Put Your Head in the Sand – When you are faced with change, be it technological, market driven, cultural, or other types of change, address it head on. Don’t assume that the challenge to your organization will just go away if you do nothing. It won’t. If you are Kodak, recognize the threat and opportunity of digital photography. If you are a newspaper company, recognize the challenge and upside of online newspapers and online advertising.
2. Have Courage – Be willing to sacrifice some of your current profits to develop the new technology or new opportunity. Embrace the opportunity to disrupt and innovate. Take risks. Even if that means cannibalizing your own business. This is why people fail. They aren’t willing to take risks and possibly hurt themselves in the short term for massive long-term gains.
3. Innovate or Die – Continually experiment with new technology and new opportunities. See change as a good thing. Stay ahead of the curve so you won’t be left behind.

How do you do this, embrace change and be ahead of the curve?

1. Identify the Type of Change – Examine whether the change is technological, market driven, cultural, or another type of change. Then come up with a plan to address this change, examining how your organization can use this change to its advantage.
2. Get Your Team Onboard – Help your team understand that the mission of your organization has not changed, but how that mission will be expressed might change. It’s imperative to have employees who are risk takers and who understand the importance of having an innovative and disruptive culture. Kodak might still be in the business of capturing moments if it had entered digital photography.
3. Implement the Change – If it is a technological change like digital photography, you might need to set up a separate entity with people who are willing to experiment and lead the change. You will need to help your team realize that their goal is not just to survive amidst the turmoil but to thrive. Change should not be viewed as a threat, but as an opportunity.
4. Ensure Your Stakeholders Embrace the Change – It is essential that your leadership team and your board are willing to embrace the change. As the leader, it is your job to be the chief advocate and persuader, to ensure your team embraces the change.  You have to let them know the real-world consequences to your organization of not embracing the change.  Look at what happened to Kodak.

There is a fundamental law of business, and indeed life.  You are either growing or declining.  You are either adapting, or you are on your way to your organization going under.  Don’t stick your head in the sand.  Lead the charge.  Embrace the change.