Your past glories may stifle growth and innovation
Dreamers lift the lid of their organisations with a compelling vision of the future
Thomas Friedman distinguishes societies by whether they are driven by dreams or memories. Countries driven by dreams are forward-looking, innovative, open to new ideas and competitive. Those driven by rose-tinted glasses of nostalgia tend to focus all their energies on making the imagined past even more beautiful than it ever was and then cling to these memories of the past instead of dreaming and building a better tomorrow.
At its peak, the Roman empire could claim to control 70% of the known world. After centuries of avarice and prosperity, it became weak as it started focusing on past glories, closing the door to external growth, causing a growth of parasites from within including senators, Caesars, pride, as well as a decline in civic cohesion. The same applies to many corporations and individuals.
Michael Hammer, business guru and author adds:
“One thing that tells me that a company is in trouble is when it tells me how good it was in the past. Same with countries. I am glad you were great in the 14th century, but that was then and this is now. When memories exceed dreams, the end is near. The hallmark of a truly successful organisation is the willingness to abandon what made it successful and start afresh”.
Nokia is the classic example of a company dreaming forward. Nokia started out as a paper mill, abandoned that and went on to making rubber boots and snow tyres before reinventing itself into a mobile giant. When an industry was near expiry, Nokia did not cleave to it but dreamt and then built its future.
Likewise, great CEOs like Jack Welch, never gave heed to past glories, even abandoning and selling off “sacred” industries in his early years at General Electric. While there were numerous cries of nostalgia and talk of how Neutron Welch was a traitor for discarding tradition, Welch had no such sentiments for great industries of the past but focused on the industries of the future and built it.
Apple, a computer hardware company, entered the music business with its iPod and revolutionised portable entertainment, growing its market capitalisation from US$1bil to over US$150bil.
Likewise, Intel abandoned its core business of making memory chips (bipolar RAM), and reinvented itself by becoming a micro-processor company. Then CEO Andrew Grove, braved and fought off a barrage of internal critics to fulfil his vision for Intel in the high-tech space.
It is the same for individuals. When you have dreams, you have a goal you’re aiming for. When you have memories, you’re thinking about the past.
Martin Luther King understood the power of dreams to build hope in people:
“If you lose hope, somehow you lose the vitality that keeps life moving, you lose that courage to be, that quality that helps you go on in spite of it all. And so today I still have a dream”.
Leaders understand that people are driven by hope. Past glories make a person proud. Pride is usually a recipe for disaster as it blocks your ability to see your true situation. Many pride-filled companies with a chequered past, fail to deal with current issues that plague them as they are blinded by this pride.
There is a story of a man who walked into a friend’s home, bruised and bleeding. When asked what had happened, the injured friend replied: “While walking in Bangsar, I was mugged by two thugs who wanted all my money. I didn’t want to give it to them, so I fought them and got badly injured!”
The man, who was shocked that his friend fought off thugs, then asked how much money he had when he was attacked. “Three ringgit”, he answered. “You fought for three ringgit?” his friend exclaimed. “Yes,” replied the wounded man. “I didn’t want to reveal my financial situation.”
Many companies are just like this man. They would rather win small, meaningless battles than avoid the reality of their current plight of being exposed. Memories tend to re-ignite the passion in many to continue working hard and fighting for lost causes.
Nelson Mandela fought for 27 years for a cause he championed. But when he became president of South Africa, he quit after his first term, even though he could have stayed on. Most CEOs or country leaders find it hard to quit when they should, often because pride gets the better of them.
Reinvention is the key for companies to remain on top. Reinvention begins when pride is discarded together with all assumptions that constrict growth.
Siemens Medical discarded its past tradition of selling its product only to hospitals and began questioning every business assumption ever made. By abandoning its long-held beliefs of the past, it changed its product marketing and sales strategy, redesigning and simplifying its complex product line, enabling it to lower costs by 30% and increase market share to unprecedented levels.
Jagdish N. Sheth, a distinguished professor, says: “World-class businesses fail because they are either unable or unwilling to discard old models of businesses when external forces have changed dramatically”.
Sheth believes that many of industry’s legacy and heritage are more of a liability than an asset. The reluctance to change, the natural tendency to follow a “prevailing wisdom”, and look backward to the past are their undoing. “Companies will thrive under tough times by challenging existing dogma”, he concludes.
Banking is a great example where most big banks were reluctant to take part in micro-financing – the lending of small sums to the poor – even with their high net margins and profits. Banks held on to their outdated prevailing wisdom and refused to change their policies, thereby losing out in the process.
Looking back to the past is not a bad thing. But when the past and present become a frame that locks you inside the corners, then it becomes harder to look outside the frame.
John Maxwell’s “law of the lid” claims that every person or organisation has a lid or ceiling. Once a person reaches his limit and hits the ceiling, there can be no more growth. Companies that hit the lid often look back to the “good ole’ days” instead of pushing the barriers off the lid.
Dreamers lift the lid of their organisations with a compelling vision of the future. Memory-folks tend to develop problem thinking while dreamers tend to be possibility thinkers. Possibility thinkers aren’t concerned about what they are, but what they can be. Problem thinkers, on the contrary, are more concerned with issues and problems being faced. It is important to have both set of thinkers but growth is ultimately dependant on the possibility thinker.
Steve Jobs was a possibility thinker. So was Jeff Bezos when he challenged conventional wisdom by dreaming of an online bookstore. The dream gave him fuel to keep working hard till Amazon.com succeeded.
I will end with this inspired aphorism:
Food energises the body but dreams energise the soul”. Dream on and build the future!
“Analysts have always tended to measure a society by classical economic and social statistics… Such statistics are important and revealing. But there is another statistic that I think is even more important and revealing. Does your society have more memories than dreams or more dreams than memories?” – Thomas Friedman
Companies at the top tend to become content, reactive to changes and preferring to maintain status quo. One person who defied this was Andrea Jung, who was at the helm of Avon for many years. Jung worked tirelessly to proactively “reinvent herself” yearly.
She had a unique way of firing herself and then re-hiring a “new” Jung the following week so that she would see things in a different light and do things differently. She said, “Fire yourself on a Friday night and come in on Monday morning as if a search firm put you there as a turnaround leader.
Can you be objective and make the bold change? If you can’t, then you haven’t reinvented yourself. If you can, then you can have a decade of tenure that is like having different jobs. I’m not the same leader I was even last year, because those skills have rendered themselves not as useful. I’ve had to reinvent myself every year”.
A simple exercise like what Jung practised of forcing yourself to “fire” and “hire” yourself back to help you move from being a memory-based person to a “dreamer” may just work for you too. Try it and keep reinventing yourself yearly!
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Roshan is the Founder and CEO of the Leaderonomics Group. He believes that everyone can be a leader and "make a dent in the universe", in their own special ways. He is constantly featured on TV, radio and numerous publications sharing the Science of Building Leaders and on leadership development. Follow him at www.roshanthiran.com