I once heard an intriguing quote that was attributed to John Chambers, former CEO of Cisco and author of the book Connecting the Dots, and that says companies die because they do the same things well for too long. But what does it mean?
In team that is winning does not move! Surely you must have heard this expression and perhaps even believe it makes sense. After all, why change something that is working and bringing good results?
After a while, I went back to school and I’m taking a training course for administrative advisors for companies, and some things have called my attention. Among the many functions of a board of directors, one of the most important is to assess the degree of risk that a company decision or choice can bring to the maintenance of the business. In this sense, choices that have a high risk tend to be evaluated more carefully and often end up being discarded in favor of maintaining some the status quo comfortable. In other words, playing with a winning team can be a high risk factor and maybe that’s why this expression has gained strength and supporters.
What I see behind this is explained exactly by the expression of John Chambers, that is, the company’s leadership tends to believe that they have a lot of knowledge and experience and this is demonstrated in the good results they achieve. Blindness and corporate arrogance, and I’m sorry, but there’s no lighter way to say it, makes the company look for the maintenance of results always doing the same thing, just because it worked or is working, but the great danger of this is that this attitude can be the choice of the path that will lead the company to shrinkage, irrelevance or even death, perhaps faster or slower, but still on a path that can be no turning back. And we have several examples to mention, such as the famous cases of Kodak, Blockbuster or even Sony, Nokia or Motorola.
And here I bring another popular expression that I don’t know the authorship, but that says that In this exponentially changing world we are living in, the knowledge that has brought us to this point is not what will take us to the next level.. In other words, the world has changed and continues to change exponentially and the knowledge and experience that brought a company to the point of success it has achieved today, is no longer what will lead it in this new world and not even what will keep this success. Again I remember the cases of the companies I mentioned in the paragraph above.
But what to do then? Well, there is no single rule and a lot of things have been mentioned as trends or paths of no return, such as an ESG strategy or even talking about Digital Transformation.
In my lectures I usually give 3 simple pieces of advice that are useful for companies of any size or segment:
1 – ACCEPTANCE AND HUMILITY – Accept the fact that as much as your company has already achieved some success, the world has changed, people’s behavior has changed, business models are changing and now competition is with business models and no longer with other companies and finally, be humble enough to understand that you no longer have all the answers for your business.
2 – CUSTOMER EXPERIENCE IS A DECISION-MAKING FACTOR – Your company was made to serve customers and not serve itself and its shareholders. Really put your customer at the center of the strategy and make the entire business model work for them. Have the courage to let good results be a natural consequence.
3 – YOUR COMPANY’S DIFFERENTIATION WILL COME FOR THE PURPOSE – Be clear about your company’s noble purpose (beyond profit), why it was created and exists and does things the way it does. But I’m not talking about the mission, vision and values that are stamped on receptions or on websites, as the purpose comes much before that and is not just a catchphrase. It must be a real desire that motivates, directs and attracts people to the brand and thus ends up being the company’s great differential in the market. A unique differential that cannot be copied by anyone else.