Have you ever asked yourself, “What was the world like when our company was founded?” Take a moment to time travel to that period and ask what was in the headlines, how was the economy, what were the values of the generation in charge, what technology was available and what was the prevailing culture? In the last few years, I have spoken to associations and counseled companies that what they need to do now is not what they have always done. There is a big gap between what the world was like when the organization was founded and what it is like now. Even if the company is only ten years old—it still may have reached maturity under the original set of philosophies and assumptions. It is common to stand on the foundation of what was built and keep working to drive those principles into our daily approach to the market. The challenge with that is that the world does not stand still. In fact, most of us acknowledge that the last few years has been a tsunami of change and yet the truth is, change has been and will continue to happen at ever increasing warp speeds. Our jobs as leaders are more complex than ever.
When should we change and what should we change? This is not about change for change’s sake. Or to de-value important and defining characteristics that have led to success. It is about acknowledging what is different in the market we serve and to adapt to it, so the company can enjoy long-term success.
As an example, most of you know my hobby is distance horseback riding. I ride 25-50 miles in competition on any given day. The organizations with which I ride have been around for decades. They were founded on a principle that horses cannot have any aids to help them perform—either tack like interference boots that keep their legs from scraping each other when moving swiftly or pharmaceuticals that treat pervasive and common issues like ulcers. As a result, competitive numbers are dwindling as many people find their horses cannot qualify. The organizations have to ask how realistic it is to continue to enforce these limiters on participation in light of the fact that just like human medicine, there are so many advances in tack and scientific knowledge of horse care, with related solutions, that it is almost like telling people when they compete they have to stop the care that is in their horses’ best interest. Purists might say well buy a different horse. Unfortunately, most of us do not want to do that, or cannot.
Or how about a company who founded a unique method of distribution that for generations was their growth stream and has become a source of exceptional relationships. Now, with the advent of the digital world, that edge is vaporizing, competition is exploding, and sales are down. Is it time to let go or better to honor the past? Some organizations find it incredibly hard to change philosophies that no longer serve them, as they have been such an integral part of the company belief system.
In the November/December issue of Harvard Business Review, Ranjay Gulati wrote an article titled “To See the Way Forward, Look Back.” He advocates that corporate history can be a strategic and motivational resource. I agree. Until we can understand why we do what we do, it is difficult to assess how we can transfer it to the current business and improve performance. It is not about staying literal but by realizing the outcome intended behind the practice and potentially finding new ways of accomplishing it.
To illustrate his point Gulati shared a story about how The Lego Group was able to use the past to light the future. A deep dive into Lego’s legacy by the CEO of the Lego Group, Jorgen Vig Knudstorp, discovered the early mission of helping children engage in “good play” that would facilitate learning and intellectual growth. He also identified an early principle that had successfully guided the organization for a time but now was encouraging an unproductive tendency toward perfectionism and overengineering, “Only the best is good enough.” He shifted the thinking toward “a continual pursuit of excellence—from an excessive and harmful focus on details to a more holistic view of high performance.” That work led to a dramatic turnaround in revenues and profits which more than doubled from 2010 to 2019.
According to Gulati, the key is determining where your organization might strategically extend or build on its history and identify areas where it might profitability diverge and chart a different less constraining path. Gulati reinforces this only works when objectivity and transparency are a part of the process.
What is limiting your organization from thriving in today’s market? Are there sacred cows that are part of the belief system? Are there practices that worked before but no longer do? Sales trends speak volumes about the market’s “vote” as to whether the company is still relevant and applying core principles in step with today’s needs. Contact me and let’s discuss details!