Friday, December 17, 2010

Change is not necessary (?)

I came across a great quote today by W. Edwards Deming. You may recall that he was the “Quality” guru of the 20th Century. Deming believed that if you continually measured and improved your processes, you would not only achieve higher quality, but you would also achieve higher productivity.

The Deming quote is this:

“It is not necessary to change. Survival is not mandatory.”

I love this quote because it touches on two key lessons we need to learn about strategy.

Lesson #1: Success Does Not Last Into Perpetuity
It is crucial to remember that success is not guaranteed over time. Just because a company is successful today does not mean that it will be successful tomorrow.

Over time, things change. Technology changes, consumer desires change, consumer expectations change, the competitive landscape changes, new product substitutions are created, your product’s place on the product lifecycle changes, your place in the economic cycle changes, your employee mix changes, processes become obsolete, and so on.

The point is that with all of that change going on (and most say it is even accelerating), it is extremely unlikely that the winning strategy before that change will be identical to the winning strategy needed after all that change.

That is why my mantra is to continually tell people that “ALL STRATEGIC INITIATIVES EVENTUALLY FAIL.” Even if a strategic initiative is wildly successful today, there is no reason to expect that success to last forever. It likely won’t even last as long as your job tenure.

Lots of companies who used to be on top of the world and swimming in success are now struggling to survive. Think Netscape, AOL, Kodak, A&P, Blockbuster, Sears, etc. And the business graveyards are full of companies who no longer exist but used to be highly successful.

Don’t let current successes lull you into thinking that all is well. As Deming put it, “survival is not mandatory.” Unless you proactively work and adapt to remain relevant in the marketplace, your success will melt away. There’s even a good chance that your firm will no longer survive.

For more on this topic, read some of my earlier blogs: here and here.

Lesson #2: Strategic Planning Requires Self-Starters
Since all strategic initiatives eventually fail, successful firms need to adapt and change in order to stay relevant. Change is one of the key elements of strategy—discovering what change is needed and how to make that change a reality.

Unfortunately, the mandate for change is often just a whisper in the high levels of a business. It is drowned out by the shouts of the crisis of the day. I have often referred to this as the “Tyranny of the Immediate.” The pressures of keeping the status flow working suck up all the time and energy, leaving little for thinking about change and the future.

That is why I like the first part of the Deming quote: “It is not necessary to change.” There are no shouts demanding strategic change. There are no legal mandates forcing strategic change. Most of your fellow executives are not demanding long-term strategic change.

Instead, the opposite tends to be the norm. The focus is on getting the status quo of the immediate done. Thinking about strategic change gets in the way of meeting today’s goals.

If you do not force the issue of change, it will not be missed by those fighting the Tyranny of the Immediate. In fact, they will be grateful. That is, until all that success from the status quo eventually turns to failure.

As a result, strategists cannot wait until the company is begging for change. This almost never happens, because daily pressures keep us from realizing the necessity for change. By the time the company wakes up to the need for change, it is usually too late…the world has already passed you by and it will be nearly impossible to catch back up.

Therefore, strategists need to be self-starters—people who fight for change even when nobody is asking for it. You are not doing your company any favors if you wait until they beg for change. For more on this topic check out my blogs on the subject of the Tyranny of the Immediate.

It is not necessary to change (you have to be a proactive self-starter and force change onto the agenda). Survival is not mandatory (if you do not force the change, your strategy will eventually fail).

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