[First posted on Leaderonomics.com on 5 April 2013]
[Updated: 9 April 2015]
Open your eyes
These past few decades have witnessed numerous companies at the top of their industry get dispatched by unknowns from nowhere. Motorola, the ruler of cellular telephones, missed the shift to digital and was displaced by Nokia, a Finnish company producing snow tires and rubber boots a decade before they conquered cellular wireless. IBM, king of the computing age, completely missed the PC revolution and was overtaken by Microsoft, Dell and a host of small start-ups.
At the same time, innovative companies were replaced by others who just copied them. Xerox invented the photocopiers but Canon took it to a whole new level with the colour copier. Ford and GM had automobile leadership for years until the Japanese copycats came in with their high value economic cars and wiped them out. Why did all these companies get dethroned?
Why do organisations fall?
Companies that close themselves to the world and focus internally may miss the boat when change occurs. Organisations that stop looking outside and don’t see changes that are happening around them soon lose their way.
It’s the same with us personally. When we are so busy with our work, our kids, our schedules and meetings, we sometimes miss important changes that are taking place around us. And these changes have a direct impact on our careers.
I recall a friend’s mother working as a secretary in the 1970s who was great on the typewriter. She could really type words fast. But when computers debuted in the 80s, she was made redundant and replaced by a savvier computer user, who couldn’t type as fast as her. But she was so focused on improving her ability to type fast, she completely missed the bigger picture—that typing fast on a typewriter would not be as important as learning to use the computer.
Companies face the same dilemma. When they are so busy with their internal operations and processes, they lose sight of the world and are soon replaced by new companies.
Just think of the products and services you use today. How many of these products are from companies that existed 60 years ago? We fly on AirAsia, buy furniture from IKEA, buy our computers from Dell, drink coffee at Starbucks, search for information via Google and get leadership training from Leaderonomics!
Having a company byline that includes “established 1850” is almost a liability today. Reputation counts for nothing anymore. Shell, has a home base in the UK and has a reputation as a producer of high quality petrol. Yet, in their UK home market, Tesco, a supermarket, is the biggest petrol retailer.
So, how do these companies lose their leadership positions?
One reason may be “social proof”, a theory developed by psychologist Robert Cialdini. The larger a crowd of people at the scene of an accident, the more likely no one will help the victims. If everyone is passive, everyone thinks that there is no emergency. Cialdini’s theory claims, “If a lot of people are doing the same thing, they must know something we don’t.”
Companies foolishly adopt this “follow-the-leader” attitude. Wang Laboratories, who established themselves as a major computer force in the 80s, decided to follow industry leader IBM and forgo the PC market. Today they do not exist.
Another reason, assert business gurus Charan and Useem, is that “a number of studies show that people are less likely to make optimal decisions after prolonged periods of success. Enron, Lucent, WorldCom – all had reached the mountaintop before they ran into trouble. Someone should have told them that most mountaineering accidents happen on the way down.”
Gary Hamel adds:
“The seeds of failure are usually sown at the heights of greatness.”
Once a company becomes an industry leader, defensive thinking seeps in and no one challenges the status quo. Many become insular and miss changes taking place, becoming irrelevant to their customers.
Great leaders are forward looking and don’t bask in past glories or get caught up with internal issues. Bill Gates constantly says:
“Microsoft is always two years away from failure.”
Gates understands the need to be engaged with the world, its trends and market changes.
Jim Collins, author of Good to Great, writes, “The key sign – the litmus test – is whether you begin to explain away the brutal facts rather than to confront the brutal facts head-on.” Great leaders force themselves to see from the outside, recognise the brutal facts facing them and make the necessary changes.
So what lessons can we draw for our careers and lives
Firstly, change happens all the time. It is not something to be paranoid about. What we need to be vigilant about is to always be observing what is happening from the outside in. And it’s not just about changes happening in your industry but changes everywhere as well. Book retailers never quite understood how Amazon.com suddenly appeared and wiped them out as they were not tracking the internet revolution.
Secondly, we need to be wary when we start becoming so internally focused and consumed by tasks and to-do lists. Great leaders learn to reflect and take time off to notice the “little things” that are walking into their lives. There are small little signs everywhere telling us about the next wave that will hit our careers and lives. Are we seeing those little signs?
Finally, watch out when you become defensive and reactionary. This is the starting point of your fall from the mountaintop. Great leaders that stay at the top for long periods are usually ones who have humbled themselves to believe that learning and growth never ends.
So, what do we need to do? We can start by taking short little breaks to take ourselves from the “busy-ness” of our lives to “observing the world”. Just spending 20 minutes a day to open our eyes by taking some time to be still and mindful of the changes that are taking place, can significantly enhance your career. There are many little “changes” walking into your industry and workplace and if you are too busy working hard to improve your “typewriting skills” inside your organisation, the “changes” may just consume you and make you an irrelevant dinosaur.
So, open your eyes and when needed, change your story!
Roshan Thiran is CEO of Leaderonomics, a social enterprise focused on inspiring people to leadership greatness. For more Be a Leader articles, click here.
Published in English daily The Star, Malaysia, 8 September 2012