News - 06.04.2019
Thriving in Even the Most Uncertain and Chaotic Times
How companies organise themselves as ripe for disruption
The world’s best companies thrive in even the most uncertain and chaotic times.
Uncertainty is unavoidable in business. Every company has to face external forces that it cannot predict nor control. This means organisational strategy needs to be at the ready in a new kind of way, so we are all prepared to take advantage when opportunities knock, as disruption plays out in real time. To make the most of opportunities, organisational leaders and their teams must know how to transform at speed and make the right strategic choices along the journey.
If you are looking for the formula on how to capitalise on disruption for your business, you don’t have to look much further than Jim Collins and his book Great By Choice.
Companies need to expect change and disruption even in the best times. In Great By Choice, Jim Collins and Morten T. Hanson call it “productive paranoia.” To take advantage of the opportunities created by disruption in your industry, you need a strong balance sheet (cash reserves) and a robust business model.
At Datum, we have a strong value-add proposition and don’t compete on price. Doing that would only damage the brand and leave nowhere to go when the going gets tough.
It’s also important to know your strengths. Disruption doesn’t mean abandoning the things you do well for the latest trend – it means adapting them to fit an updated industry. Even in times of major industry upheaval, a good recipe usually needs to be partially adjusted, not revamped or replaced.
Ask yourself: what are the things we do well? What do we do that creates value for our customers (i.e. solves their problems)? These competitive advantages do not change, whether we are in more disruptive or stables times.
Innovation is the key to tackling disruption, but you should only innovate when the evidence supports it. One mistake companies make with innovation is thinking that they need to be far ahead of the curve. You don’t. It is, of course, important to develop new products, but it’s not as important to be the first. As with your strengths, you have to identify what works and do it better than everyone else. The concept of firing bullets, meaning test small areas in markets before going for a big push into a new market, gives you a much better chance. And, if you’re constantly going through this process, you’re ready to go when disruption does happen.
The best companies know their targets and use disruption and innovation as a way to find a new path to that target. Average ones keep changing their targets.
Uncertainty is a fact of life. We will all need to deal with it at some stage – in business and life. At Datum, we faced uncertainty when frame tariffs were introduced as part of the Trump administration’s trade tensions with China. Because we had identified our strengths in advance and were constantly improving, we didn’t need to worry as much as some of our competitors.
By expecting and planning for uncertainty in your business – by building a strong business model and roleplaying the “what-ifs” – you’ll be able to deal with disruption when it hits. This isn’t limited to coping with uncertainty and preventing damage. Done right, you can continue to achieve growth during these periods.
Here are 3 big lessons from Jim Collins’ books that can turn uncertainty into opportunity:
- Great companies have incredible discipline.
- Innovate only when the evidence supports it.
- Never rely on luck or chance to take care of things, maximise them by working hard instead.
Companies today no longer have the luxury of “doing what we’ve always done.” Many companies are unprepared and/or caught by surprise. The disruption to their business model requires reinvention and transformation. Business as usual won’t succeed when disruption hits your industry.
As we all know, disruption is here to stay. It is happening, and shows no signs of slowing down.