Change is happening all around us. How your business deals with that change could mean the difference between a thriving future and a failed company.
“Don’t chase the change curve. Be the change curve.” That’s entrepreneur and investor Vusi Thembekwayo’s secret to long-term growth. He believes there are three steps to getting change right in your organisation: Explain the change, determine what to do about it, and then critically evaluate what’s stopping you.
“This third step is critical,” he explains. “Even with glaring evidence that what we are doing doesn’t work, we still resist change. We’ll have all the data and even a plan in place, and we won’t follow through.”
This is why companies fail. Take Nokia for example. Nokia was initially good at change and diversifying.
“Nokia was a paper producer. It was also involved in the Agri industry, as well as telephony. It laid fibre. It was a very diversified business, which then stumbled across mobile, got good at it, then perfected it, and finally specialised in it. The diversity went away. And then Nokia died. Why? Because it was a phone company, not a computer company. Nokia stopped looking to the future. It didn’t see the changes headed its way, and so it lost the incredible market share it built up.”
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Businesses that understand the laws of disruption will be the companies of the future. If you don’t adapt, you’re unlikely to survive.
The change deficit
According to Thembekwayo, we can’t think about the world as it was – or even as it is – but, rather as it will be. “We talk a lot about disruption, but what does it actually mean? Disruption happens when a competitor is able to deliver a product or service cheaper, better and faster than the incumbent. If someone else manages to achieve that while you are resisting change, then you have a problem.”
Thembekwayo refers to this as the change deficit. The company that saves a customer time, resources or energy will draw people and businesses towards it. You just better hope that’s you and not your competitor.
Cheaper, better, faster
One of the simplest ways to check the pulse of a business is through your Net Promoters Score (NPS). In other words, how many of your own people would recommend you? “A zero means none. A 50 means I will physically tell people not to buy from you (and I work here),” says Thembekwayo.
“You need to have a positive NPS, and yet so many companies don’t even consider this metric. Step one is to achieve a positive NPS. Step two is to figure out how to do what you do cheaper, better and faster – then you become a disruptor, and your chances of survival just increased significantly.”
The question then becomes what you can leverage for a new effect. “There are a few critical questions that can point you in the right direction. Where is your IP? What can you offer that your competitors can’t? What will clients pay for? Once you have these answers, you can start translating customer insights into profitability.”
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Finally, Thembekwayo advises that you change your perspective. “It’s important to understand that every single individual has some form of bias. We each experience things individually, but more importantly, when we look to the future, we experience things as they were. The future world emulates our current existence, instead of a different, new and exciting world.
“We look for things as we’ve understood them, and we superimpose our beliefs on them, and what we expect to see. This means that we don’t see things as they actually are. Within that context, it’s very difficult to see the change that needs to happen, and to follow through with the necessary changes. Maybe the solution isn’t broken. Maybe the problem is broken.”
There are four key questions to ask yourself and your organisation to begin your journey of change:
- Are you looking at the world as it is, or the world as you know it? There’s a huge difference.
- Are you denying the risk of staying the same, believing that even though the world is changing, you don’t need to?
- Are you geared for change? Change happens whether we like it or not; customers move whether we like them to or not. You need to be prepared for these changes.
- Are you willing to cannibalise your own products to save the business in the long run?