Is it okay to take your foot off the gas in this eat or be eaten business era?
“I have a question for you,” said my new friend, Hamish. Hamish (a CEO of well-known lady’s fashion retail business) and I happened to strike up a conversation in the Lufthansa lounge in the Geneva Airport.
“Does a company’s CEO bloody well always have to be pushing for growth or is it okay to just rest for a while? And if yes, what do you say to your staff to keep them motivated? All the stuff I read lately is all about being a game-changer, disrupt your industry, and you have to lead with purpose! My intuition is telling me to sit tight for a bit. But, I wonder if I am abdicating my CEO responsibility to keep a burning platform ablaze to ensure my folks are peering around corners, not taking profitability for granted, and agitating for acquisitions. What do you say, Don?”
I could appreciate where he was coming from. Based on all the data I have seen and the research we do, the current formula for success in our current environment can be characterized as innovate or die. The rate of diffusion today of new products and technologies is staggering. For example, to reach 50 million users it took 13 years for television, 4 years for the internet, 9 months for Twitter, and 35 days for Angry Birds. Given this rate of diffusion, if you are not on top of things, your business can become irrelevant before you are aware you need to adapt. As a result of not being on top of things, listed companies now have a 1 in 3 chance of disappearing in the next five years.
“Hamish, what do you intend to do by sitting tight?”
“Give my team a period of rest after a very stressful transformation, build up cash reserves to be able to seize emergent opportunities, and to develop the belief that good ideas in our company can come from anywhere, not just my brother and me.”
“So you could say, Hamish, that you are not abdicating your role as the CEO, in fact, you are building a foundation of flexibility to be able to deal with the unstable future.”
John Hagel asserts, “In a world of exponential, rather than linear change, it becomes increasingly important to maximize flexibility. The same resources that were a source of strength in stable times become an anchor that limit the ability to move in more turbulent times.” So, it would seem Hamish’s intuition is bang on.
In a recent article I wrote, I make a case that corporate leaders are missing a big opportunity to not use their current existential transformation efforts to develop the capacity to be future resilient. What Hamish was speaking to was his feeling that he needed to capacity build.
“Hamish, did you know that there is a part of successful military operations called, the consolidation phase? During this set period of time, soldiers rest and tend to their wounds and losses, equipment is replaced or fixed, and lessons learned are gleaned. Based on the developing situation, relevant just-in-time training is conducted, and teams are rebuilt with new thinking and tools.
“Does your team know that you are deliberately creating a period of time to consolidate? That you intend to build a platform that could be used as a launching pad to seize emergent opportunities and what they should be doing to build that platform? Do they know that they could be the source of new ideas? What are you doing to build a future resilient capacity?”
So, my response to Hamish was, “Yes, it is necessary and responsible to take a breather to consolidate and build a platform of flexibility. It may also be wise to limit this time and communicate the timeline and for what the time should be used for.”
*1—Bernd Leger, “20 Fresh Mobile Trends”