Tuesday, October 2, 2012

Radical Reinvention

We know that business conditions change every six months. Customers change; their needs change. Regulations change. Suppliers change. Your skill set from your workforce changes. You really want it to be this way. If not, then you're suffering from stagnation. Without radical reinvention and challenging of the status quo, here's what it means to your workforce, according to Jason Jennings' The Reinventors (2012):

  • Without reinvention, there will be little growth. Without growth, people who want to have more opportunities for wealth and challenge will be discontent and bored. They will leave taking needed skills, ambition, intellect, connections and so on.
  • Without radical changing of business processes, you'll fail to keep up with customers' ever-changing desires for higher quality, more functions, better service, etc. They'll leave for your competitors. 
Based on a study of 22,000 companies, stalled companies lose 75 percent of their enterprise value. When the shareholders are not being satisfied, top management changes...unless it's a private, family-owned company. Even then, it should be uncomfortable for the board and executives. Even after a management change, less than half of the companies get back to moderate sales growth of 4%. Stagnation is a death knell.

If you're content with the status quo, be afraid. Change could make you obsolete without you're knowledge. If you start losing value, then it may be hard to recover unless you reinvent yourself, your staff and your whole mode of operating.

I've seen companies do this, but it has taken some radical changes to convince the market that your company is for real, can be dependable and have some integrity (i.e. be believable in its promises). Market share has been regained. Value has been created. To do that, whole new policies needed to be created. Corporate cultures were transformed so that new levels of collaboration and trust were achieved.

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