How old is your business? No, really. How old? As we get older, inevitably we get a little less flexible, slower in response, a little more risk-averse, and we tend to look back in time more often than forward. Unfortunately, this aging process happens in businesses too. But it doesn’t have to. Businesses can self-renew.
I recently had lunch at a charity golf outing with a group that included an orthopedic surgeon. He shared some medical insights into the aging process with us. One was that the risk of severe injury while learning to snowboard for people over 40 is almost 100%. Bones calcify, people are less flexible. They fall backward and suffer head or neck injuries or they fall forward and break wrists or arms or both. The other insight was how as you age, neurotransmission slows down. In other words, the neurons in your muscles actually fire more slowly by as much as 40%. You think you can guard that guy in basketball but your muscles just can’t react like they used to. And then, I’ve also noticed how as people get older, they tend to look back in time – the way things were, the good old days, etc. – more frequently than they look forward to what’s ahead (which is entirely understandable).
Unfortunately, businesses needlessly suffer the same aging process. As they get more “mature” they tend to calcify and be less flexible, react more slowly to the environment and competition, become a little more risk-averse, and in the face of change, the culture looks back to the way things used to be. For people, this aging process is irreversible. But for business, you can do something about it. It takes five things to battle the aging process in business. Here they are:
Strategy – The best antidote to the business aging process is an innovation strategy. Most businesses don’t have one; most don’t even know what it is. What they have is a plan, heavily laden with financials, to deliver the status quo. Innovation, the process of an idea becoming a reality that creates value, gives the business an opportunity to selectively and strategically renew not only its product portfolio, but itself; a new joint here, a new vital organ there, a new muscle complex…
Leadership – Too often leaders got to where they are by building the current state and are heavily vested in maintaining it. The only way a business can remain “young” is for leaders to think clearly and objectively about where they are on the maturity curve, the health and vitality of the business on a long-term and regular basis, and be willing to take risks to do something about it by changing what needs to be changed.
Execution – The saying goes something like this, “Armies are always perfectly equipped to win the last war.” The capabilities of today are not necessarily the capabilities needed to compete tomorrow. In light of the organization’s strategies, thoughtful consideration needs to be given to how the capabilities of the people, processes, and technology will “stay young, energized, and vibrant”; how the business is going to execute strategies for renewal; and how business design will need to change to win going forward (not just the next quarter’s financial targets).
Change Management – Even though the track record for change management is abysmal, it doesn’t mean it’s not important or can’t be done in a better way. For a lot of reasons, people have a hard time changing. And traditional approaches to helping them are dubious. But with a firm understanding of the ABCs of behavior, change not only happens, the change process itself can be renewed and accelerated. “Change speed” counters the aging process.
Culture – Culture kills anything new. It’s as simple as that. Preserving the status quo is a fundamental function of culture. To introduce new strategies, new capabilities, a new business design, without a strategy to change the relevant aspects of the culture is a waste of time and effort. To battle the aging process, you need to pinpoint and renew behaviors that define the culture as it should be.
As we humans get older, we develop ways to compensate for the aging process. We avoid high-risk pursuits like snowboarding. We spend more time stretching our limbs. We drive a little slower on the highway. And we fondly remember days gone by. But a business can’t afford to accept aging. Like us humans, businesses face the prospects of an environment demanding more flexibility, more risk, more forward-thinking. Only by renewing itself can business hope to battle the aging process and win in the future.
So, how old is your business? Are you keeping it young, fit, and capable?