Harvard Business Publishing

Sir,

The inability or disinclination to change may have to do with one of Newton's laws: we are comfortable with the status-quo until an external stimulus (loss of market share, erosion of top and bottom lines, lack of innovation) forces us to do something.

The irony is that the more successful an organization appears to be, the more infalliable its leaders seem to think they are. The truth, shorn of all technical jargon, is that just as an organization would have displaced another to accupy a pre-eminent position, there is a clear and persistent danger of another organization returning the compliment.

The need for organizations today is to keep their antenna open 24x7 365 days of the year. Failure to do so is to invite someone to blow them away. The major problem for the large organizations is that even if the leadership is willing to change, the thousands (and in some cases hundreds of thousands) of followers may not be willing. The solution is to build and nurture an organizational culture where people are encouraged to challenge the present, are not stifled from making honest mistakes, and are ever ready to change whenever the situation so demands. Better still, people should be trained to change before a tidal wave hits them.

I realize this is not easy; but as example after example have shown, what, if any, is the alternative?

Warm regards

It's funny you chose to blog about this Bill. Two weeks later, Irving's story continues to gnaw at me. There's a reason why business model innovation remains an entrepreneurs game: more than a process, innovation is a state of mind.

In our last session of BIF-3, Mark Cuban was asked by Walt Mossberg whether he agreed with Irving's conclusion that companies must walk the death march before they can truly change. Cuban's response: "Absolutely, which is why I usually sell the company before it gets to that point."

The audience naturally laughed and Cuban followed up his cheeky statement by saying: “Every day I wake up knowing that there is a 12 year-old out there somewhere that’s trying to kick my ass. If you don’t pay attention to your business your ass will be kicked.”

Established companies are actually rather good at embracing change if it sustains their current business model and delivers an improved product for their customers. I think Clay Christensen summed it up best during his interview with Walt likening business model innovation to biological evolution: Populations evolve, even though individuals can't. The same thing happens in the corporate world, Clay said. "The population of business units within corporations evolves, even though individual business units can’t. That’s because the capabilities of business units reside in their processes and their values, and by their very nature, processes and values are inflexible and meant not to change."

The key, according to Christensen, is that companies must invest to create the new growth business while the core business is still growing, because new business units don’t need to get big fast. But when the core business stops growing, investing to create new growth businesses becomes impossible. "Once a company’s growth has stopped, the game as we have known it is over," he said.

One last thing - Charles Schwab is another good example of a company able to reinvent itself. And for your readers, we'll be posting all the storyteller videos (including Irving Wladawsky-Berger, Clay Christensen and Mark Cuban) later this week at our Innovation Story Studio.

Thanks for all your efforts co-hosting the BIF-3 summit Bill. It was a great experience which we couldn't have done without you.

I think one of the answers is INERTIA. While one learns how to manage a business and its ongoing challenges, we distance ourselves from the most basic principles - Change is the only constant. Because CHANGE involves running two parallel streams of thought - one is the business management side (which consumes most of our daily time) and the other is the change side (which typically should guide us to our future). When a business reaches a 'near-death' scenario it has only one thing to manage - DEATH of the business. A 'near-death' scenario creates inertia to change. It is no wonder that change happens in bits and spurts and not as a continuium.

Rolling Stones gather no Moss!!

We all know that change is inevitable, but it is the resistance to change that prevents the change from being smooth, it's human nature to resist change and step outside the comfort zone, I guess!

The more one delays change the tougher it gets and the closer you get to the "Near Death" experience. In large organization this resistance to change is predominantly due to the fact that there are a large number of old timers in the organization who are set in their ways of working and have imbibed the culture of the organization, thus failing to think differently. I am not questioning their expertise, but the more you have been there, the more comfortable you get.

Having said this, when you look at organization that are changing & innovating constantly are the one with the youngest talent pool, people how are ready to take risks! There are multiple examples: Google, HCL, Yahoo, Apple, etc.

One needs to keep changing and innovating for growth!