Change or be changed – which one will you choose?

I end­ed my last col­umn say­ing that com­pa­nies need to be agile, resilient and inno­v­a­tive, espe­cial­ly in the New Nor­mal. I’ve been reflect­ing on that, and I thought it would be a good idea to define them because every­body has a dif­fer­ent idea of what they mean. These are mine:

Agile

Quick and spry, agile com­pa­nies sprint for­ward even when things are ambigu­ous and uncer­tain. Their work­forces have been empow­ered to make deci­sions at the point of exe­cu­tion rather than wait for the approval of managers.

Resilient

Like trees with deep roots and flex­i­ble trunks, resilient com­pa­nies with­stand the strong winds of eco­nom­ic uncer­tain­ty because of their sus­tain­able and future-proof port­fo­lios and busi­ness models.

Inno­v­a­tive

These are the dis­rup­tors, the rebels. Inno­va­tion is deeply embed­ded in their DNA. They are designed to enable break­throughs – from process­es down to the mind­set of each employee.

The push to change

As I reflect on these and observe the many com­pa­nies out there, I realise that so many are not doing enough to ensure that they have these qualities.

The real­i­ty is this – the impe­tus to change often comes from exter­nal forces.

In some indus­tries where the mar­ket is unsta­ble and con­stant­ly chang­ing (the telecom­mu­ni­ca­tions indus­try, for exam­ple) com­pa­nies need to be quick, agile, con­stant­ly inno­vat­ing and resilient because if they aren’t, they’ll be in trouble. 

Our news­pa­pers are full of sto­ries of com­pa­nies who were once lead­ers of their mar­ket but are now a shad­ow of what they were due to their inabil­i­ty to adapt to new tech­nolo­gies or inno­vate fast enough to over­take competitors.

But then there are indus­tries where the envi­ron­ment is sta­ble and not much changes. Elec­tric­i­ty gen­er­a­tion and dis­tri­b­u­tion, for exam­ple. Unsur­pris­ing­ly, in these envi­ron­ments, man­age­ment tend to be very sta­t­ic, bureau­crat­ic and slow to change.

The threat to their mar­ket dom­i­nance is very low. So, these com­pa­nies do not have any exter­nal exis­ten­tial threats. Man­age­ment is prob­a­bly think­ing: Why both­er being agile or devel­op­ing any­thing quickly?

But is sta­bil­i­ty guar­an­teed these days, even for these indus­tries? As COVID-19 proved, any­thing can happen.

Shock treat­ment

 One of our clients is a well-established hold­ing com­pa­ny. We were sur­prised to find out that while the rest of the world has moved on to dig­i­tal sys­tems, they were still doing things in an anti­quat­ed way, using tools that were 20 years old. Imag­ine, an estab­lished hold­ing com­pa­ny with busi­ness glob­al­ly and they didn’t even have an Enter­prise Resource Plan­ning (ERP) sys­tem! In today’s fast-moving, ever-evolving world, not hav­ing full vis­i­bil­i­ty of your oper­a­tions is a recipe for fail­ure. We could not well leave that alone.

So, I told the con­sul­tant attached to the project to talk to the company’s man­age­ment: “Be provoca­tive. Lay down the real­i­ty for them: Change and mod­ernise or fade away.”

He did just that. He told them how they were doing things wrong, what the con­se­quences were and what would hap­pen if they did nothing.

It was a wake up call that got them to progress significantly.

This may seem like a harsh and risky approach, but some­times “shock treat­ments” are the only way we can get clients to realise that they need to change. 

“Shock treat­ments” come in many forms. It can be new tech­nol­o­gy, high com­pe­ti­tion or reg­u­la­to­ry changes. And then there are dis­rup­tive, unfore­seen events such as nat­ur­al dis­as­ters or accidents.

Per­son­al­ly, I pre­fer man­age­ment to be shocked by a meet­ing than by an unprece­dent­ed dis­rup­tion such as COVID-19. It’s sober­ing to realise that not a sin­gle indus­try was spared by its effects. If you’re only start­ing to imple­ment trans­for­ma­tion after a dis­rup­tive event, it’s often already too late.

As I write this, lock­downs are being reim­posed around the world, Malaysia includ­ed. Even if the vac­cines are suc­cess­ful and COVID-19 goes away, we need to remem­ber that there will be more unex­pect­ed events to brace for – that has been the way of the world for millennia.

Now, the million-dollar ques­tion: How can com­pa­nies become inno­v­a­tive, resilient, and agile?

From my obser­va­tion, com­pa­nies that have all these traits have vision­ary lead­ers who are not afraid to turn the organ­i­sa­tion towards a dif­fer­ent direc­tion even if it means attack­ing their cur­rent busi­ness model.

Sec­ond, the cul­tures of these organ­i­sa­tion embrace mind­sets and behav­iours that enable agili­ty, resilience and inno­va­tion to thrive in the company.

To make this hap­pen, it takes courage and great deter­mi­na­tion to push your vision for­ward even if the jour­ney ahead is lit­tered with obsta­cles and naysay­ers. Change is nev­er easy nor is it some­thing many do will­ing­ly, but those who dare to take it on will reap great rewards down the line. Take risks – par­tic­u­lar­ly if you are con­vinced you are right.

Also, I believe firm­ly that change must start from the top.

There are lead­ers who dri­ve change. And then there are lead­ers who are dri­ven by change. Which one are you?

Krish­na Pau­pamah has worked with com­pa­nies glob­al­ly to trans­form their busi­ness for over 35 years. He is the Founder and Group CEO of Renoir Con­sult­ing. He can be reached at [email protected]

This col­umn first appeared in Busi­ness Today on Feb­ru­ary 1, 2021.