Led by change-agent leaders, these organisations willingly take on the classic paradox of “crisis is opportunity in disguise.” For them the future, though uncertain, is exciting and engaging.
This positive attitude, however, should not minimize the difficulty or scope of the challenges. The problems are real and often serious; in some cases, the survival of the organization is at stake. In the Darwinian world of business, “change or die” is a harsh, but undeniable, reality.
A change in strategy is needed
Consider the CEO of a manufacturing company who faced the possible and even probable extinction of his organisation. In the midst of economic hard times, offshoring of technology and divestiture of the company by its former parent had caused a significant loss of customers. The advice from the board of directors and senior leaders was to stop the bleeding: execute the existing strategy better and regain customers.
The CEO, however, stepped back and asked a deeper question: What business should the company really be in? The former parent had divested the company because management had seen its business as essentially obsolete, while the rest of the firm moved in a different direction. What if the former parent company was correct?
Willingness to ask these tough questions led the CEO to realise that the key to the company’s turnaround what would put it on a path of greater profitability and sustainability for the future at the time accounted for only 17% of its business. The other 83% was history. Only by changing that business mix could the company hope to survive.
There's always hope
Rather than be gripped by fear, the CEO embodied a mindset of more. He professed a deep-seated belief that there was great untapped potential within the company and among existing and future customers. This became the basis of transformation.
To move forward, the CEO needed to get the board, the bankers, and employees to take a leap of faith about recreating the business. In essence, they had to get comfortable with a seismic shift change so profound it meant remaking the entire company.
For companies today, reinvention is key. Even when companies are doing well, they cannot rest on the laurels of what worked in the past. Innovation is a continuous process.
Consider Netflix, which began as a subscription service to deliver DVDs and streaming videos to subscribers, then later expanded to producing its own original content, including critically acclaimed series such as “House of Cards” and “Orange Is the New Black.” (A new series on the Brazilian political scandal reportedly is in the works.) To stay relevant to customers with more choices, Netflix, like many firms, has had to rethink its offerings.
The challenges of change
Change, however, is uncomfortable for most people. Within a traditional organization such as a manufacturing company, change of the scale involved in a turnaround is particularly daunting. But when the situation is dire, change is the only option.
The manufacturing CEO put a net under the requisite leap of faith by linking what people in the company knew (the “familiar”) with what lay ahead (the “new”). Brought together, the “new yet familiar” became a powerful paradigm for change that made the challenges exciting and emotionally engaging. Key to the kind of thinking around any turnaround or other significant change is using familiar metaphors, symbols, and rituals. New projects and practices are framed in the context of how people think of themselves, their abilities, and/or the culture of the organization.
The manufacturing company, for instance, was filled with people who saw themselves as tough and survivors self-described as “junkyard dogs.” The CEO used this familiar image in a new way to spark the innovation. He instituted a “Junkyard Dog Award” for the most innovative idea of the month, which encouraged people to use familiar knowledge to create something new. And, they were rewarded for following their “inner junkyard dog instincts” to fearlessly bring forward new ideas even scraps of raw, unpolished concepts.
The company successfully turned around from an obsolete business model to one with an exciting growth track. It could only be accomplished with a mindset of more to unlock creativity and innovation. No longer limited by old ways of thinking and doing things, people are better able to navigate the challenges with new models and practices.
Believing in what is possible, change is no longer frightening. Instead, it is embraced wholeheartedly to create a new narrative, one in which people can see themselves as part of a new and unfolding success story.