Yes, there’s plenty of data about the global rate of change. It’s unprecedented if you look at technical innovations (iron age to industrial age), adoption of new technologies (radio to TV to Internet) to social change (woman’s right to civil rights to equal rights). This only becomes apparent, however, when you look at it from an historical perspective over an extended period of time.
And as a whole and over time, we adapt and continue to evolve. Individually, we may struggle and refuse to change with, potentially, a bad end.
The same holds true on the business front. As fast as the business environment seems to change, it’s only over a perspective of time that the pace is realized. In the moment, we’re dealing with the current mode of operation. It’s another day, another challenge, determination to drive the ball into the end zone and score.
Here’s the problem if you’re making money in your small business, or enjoying solid performance in your enterprise – you’re being lulled into complacency. This is the general concept behind The Innovator’s Dilemma.
Whether is responding to current customer demands or protecting revenue streams, you’re naturally inclined to avoid the pain that innovation and change can bring. Why do you need the pain when things are going so well. There lies the danger. You can’t think as radically different as your competition. There’s a disincentive to explore new or lower margin ideas to spur your growth.
Busy is mistaken for fast
Our days fill up. We have a propensity to say yes, and an inability to say no. These all contribute to a full calendar. As Stephen R. Covey suggests in chapter 3 of his 7 Habits for Highly Effective People – put first things first. Two of his quotes on this topic are “Most of us spend too much time on what is urgent and not enough time on what is important.” and “The key is not to prioritize what’s on your schedule, but to schedule your priorities.”
Until we take those steps and make the hard choices to focus on the most important aspects of our business, we won’t make the best decisions to ensure it’s ongoing success.
Fast is mistaken for failure
I’ve witnessed this in a number of companies I’ve been with. Whether is arrogance or optimism, there’s satisfaction in seeing the failures that occur in your space. This boosts your confidence that you’re on the right path. Those early and first movers that haven’t cracked the market are crashing spectacularly all around. This may not be an innovative product problem. It’s quite possibly one of timing.
Just like it’s to our advantage to learn from our mistakes, there are advantages to reviewing why competitors in your space failed. We know others are going to continuing trying to crack the code of success in your market, often chipping away at the low dollar business. And we find ourselves trapped again in the Innovator’s Dilemma.
Failure results in caution
The other market pressure often comes internally from our organizations. Whether it’s part of the corporate culture or our own risk tolerance, failure is often not considered a success – though it’s often a great opportunity to learn.
If you look at the averages, one in ten VC-backed startups will succeed – and these are later stage startups. The failure rate of companies at the seed stage is even higher. I’ve not been a part of many organizations will tolerate a 10% success rate. Failure typically results in retreat to better known existing products, cost cutting and efficiency initiatives – more conservative and safer bets are made. Unfortunately, this often in shrinking markets.
Caution means you miss the trend
By the time we’ve taken our businesses through each of these stages, the competition has caught up and the market has shifted. This can take years, which is enough time to have avoided missing the trend. I’ve watched markets creep up on businesses that didn’t pursue the new technology because the market was too small. But the rollout and adoption was underestimated.
By the time the market was big enough, my company no longer had its advantages – it was a bit player in a new industry, and it never really recovered.
Don’t let this happen to your company.
- * Test new ideas.
- * Learn from failure.
- * Reward learning and success alike.
- * Continue to grow.
It’s not easy, and you’ve got to keep moving because your business is changing. Just not as fast as we think.