Even the most successful and recognised businesses, sooner or later, can run out of room to grow.
2/3 stalled companies are later acquired, taken private, or forced into bankruptcy according to the Harvard Business Review.
This reality means businesses must continuously reinvent to survive.
The choices then become simpler:
Will you spiral downward into the oblivion OR jump on the next growth curve?
Companies fail to reinvent themselves not necessarily because they are bad at fixing what’s broken, but because they wait much too long before repairing the deteriorating walls of the company.
If an organisation fails to reinvent themselves in time, the potential consequences are ominous.
Businesses are often left scrambling when their core markets begin to stagnate when investing all of their energy in managing existing operations rather than creating the foundations of successful new businesses methods.
Once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering (Harvard Business Review).
Although this number is low, there is still hope.
According to the Harvard Business Review, companies that successfully reinvent themselves have one trait in common.
Focusing beyond the financials and managing three much shorter but vitally important elements:
1. Tracking the basis of competition in their industry,
2. Renewing their capabilities, and
3. Nurturing a ready supply of talent.
In building the offerings that enable businesses to climb the financial curve, high performers should invariably create distinctive capabilities.
Frontline employees, research teams, management teams – all have a vital role to play in detecting shifts in the market.
It comes down to bring these voices into the strategy-making process.
To survive the long haul, businesses should periodically reinvent themselves.
Competition is shifting across industries.
Before a successful business hits its revenue peak, the basis of competition on which it was founded expires.
High performers see changes in customer needs and consistently create the next basis of competition in their industry, even as they utilise existing businesses that have not yet peaked.
As quickly as competition shifts, the distinctiveness of capabilities may evaporate even faster.
By the time a business really takes off, imitators have usually had time to plan and begin their attack, and others, attracted to marketplace success, are sure to follow.
So how then, do companies build necessary capabilities?
If the priority is to remain competitive, strategies cannot be formalised.
High performers use multiple methods and keep the timing dynamic to avoid predictability and to prevent the system from being gamed.
Future-proof your business.
Disruption is one of the most used buzzwords of 2019 to describe innovative strategies implemented by organisations to become industry leaders.
To be able to grow enough to make such a meaningful impact on the growth and economics of a business requires foresight, early commitment and tenacious faith in the power of research, development.
Tune into videos from our TaaS and Digital Transformation events on April 2 and 4 here focusing on the pitfalls and possibilities.
How are you going to reinvent your organisation to stay nimble and competitive? Comment below.