Reinvention Reply

Daniel Burrus, best selling author, says rapid change in business and technology is the “new normal.” However, in the 21st Century, “change” is actually too weak a descriptor.

Today, it’s all about transformation. This means you can’t go backward, and you can’t stand still. You can’t sit still and you can’t keep doing what you’ve always done — even if you do your best to keep doing it better.

The only way for your company to survive, let alone thrive, is to continuously reinvent and redefine.

Reinvent and redefine what? Everything.

Harvard Business Review wrote about this back in January 2011 – Sooner or later, all businesses, even the most successful, run out of room to grow. Faced with this unpleasant reality, they are compelled to reinvent themselves periodically. The ability to pull off this difficult feat—to jump from the maturity stage of one business to the growth stage of the next—is what separates high performers from those whose time at the top is all too brief.

As Matthew S. Olson and Derek van Bever demonstrate in their book Stall Points, once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering. Those odds are certainly daunting, and they do much to explain why two-thirds of stalled companies are later acquired, taken private, or forced into bankruptcy.

There’s no shortage of explanations for this stalling—from failure to stick with the core (or sticking with it for too long) to problems with execution, misreading of consumer tastes, or an unhealthy focus on scale for scale’s sake. What those theories have in common is the notion that stalling results from a failure to fix what is clearly broken in a company.

Companies that have set the standard for reinvention over the last while are:

IBM – before the 1980’s only the most gadget geared person had a computer. The IBM PC brought this machine to the masses.

Ford – With just some bucket seats, a floor shift and cosmetic tweaks, the lowly Ford Falcon “magically” transformed into the wildly popular Ford Mustang.

Accenture – splitting off from the accounting firm Arthur Anderson, Accenture is one the of the world’s largest consulting firms today.

Starbucks – Before, you picked up a cup of java at a convenience store. With upscale interiors and gourmet edibles, Starbucks created a “coffee experience.”

Nike – Transformed itself from making sneakers from waffle irons to producing Nike+, which monitors a runner’s performance via a shoe radio device that’s linked to an iPod.

Allegheny Technologies – With a history going back to the Revolutionary War, Alleghany now boasts some of the world’s most advanced production capability for specialty metals.

Red Hat – It started as a catalog business for Linux and Unix software and accessories. Now an open-source company, it makes money by selling subscriptions for support, training and integration.

Apple – The reinvention king began as a desktop computer business. It now sets the bar for mass consumption of tech products such as the iPod, iPhone and iPad.

Blockbuster – You may recall Blockbuster Video — it rented out DVDs and VCRs at retail stores. Then Netflix NFLX +1.88% came along with DVD-By-Mail — and that made it cheaper and more convenient for consumers to get the movies they wanted. Blockbuster was unable to adapt and perished.

There are many different stories and paths to successful reinventions.  Great leadership is always needed.  Xerox and IBM would either be gone or be like Eastman Kodak today if Anne Mulcahy and Lew Gerstner had not come at the right time and begun to lead them down new paths. 

Some common themes of successful reinventions:

Although the execution phase of a reinvention takes many years, the decision process has to be clear and efficient.  Many companies disappear before they can reinvent themselves.  When it becomes clear that reinvention is needed, waiting until the perfect path becomes available can be suicidal.

 The CEO and the Board have to be aligned on the reinvention path, and, then, they have to communicate clearly and frequently to all stakeholders: employees, customers, shareholders and other investors, the media, and the broader community. 

The process has to be as transparent as possible, so that stakeholders with useful feedback can contribute insights as the process unfolds. 

 Hewlett-Packard is an example of a company that, during Carly Fiorina’s tenure, could not get agreement within its board about its reinvention path.  For example, the board had a public dispute about the Compaq acquisition.  The company has struggled ever since, through a variety of governance crises.

 Successful reinventions are much harder to achieve with big, transformative acquisitions or mergers, than with a combination of organic changes, combined with many small, focused acquisitions.  Large acquisitions may add assets and businesses needed for reinvention, but, unfortunately, they also add legacy assets that need to be sold or shut down.  The process of sorting out the wanted from the unwanted pieces of a large acquisition is time-consuming and distracting, and it often causes the acquisition to fail.

 The idea of moving from one business in which the company is an expert to a completely different business in a completely different industry in which it has no prior experience has about as much chance of success as going into an unrelated start-up business, which is very low.

 The company going through a reinvention has to accept the fact that it may lose shareholders who depend on the cash flow from the existing business for dividends or share repurchases, since capital has to be redeployed for growth and development in the new business space. 

 Reinvention is easier to do in a situation in which the company’s survival is at stake, like the situation faced by Xerox or IBM, when there is a “burning platform,” than it is when decline is gradual, and the conditions that precipitate the significant decline have not yet happened and are not yet visible.

 Finally, as a conclusion, reinvention is extremely difficult.  Many, if not most, companies fail at it, either because they make the wrong decisions, like Eastman Kodak did, or wait too long to make the right ones.  The reason we closely study stories like Intel and the Thomson Corporation is that successes like theirs are highly unusual. 

Sustained or transformational success is very difficult to achieve.

Mentors in business Reply

In life one can have many mentors, a family member, a family friend, a friend’s parent. As people come and go through one’s life journey we come across folks who influence and guide us and have an impact on how we think and behave. A lot of this is unconscious both from the mentor and the person being influenced.

Why not take a conscious approach towards mentor relationships in business?

My perspective on this topic in the business world stems from observing a huge talent pool of youth entering the business world, ready and eager to learn. The energy and aptitude in them is tremendous, however the wisdom that comes from experience takes time to acquire, and is lacking.
Why not pair these individuals with members of the workforce getting ready to retire, or even those who have already retired from the organization to help the new generation build their skills and propel their growth.

The concept of a mentor stretches back through recorded time.
In Greek mythology, Mentor was a loyal friend and adviser to Odysseus, king of Ithaca. Mentor helped raise Odysseus’ son, Telemachus, while Odysseus was away fighting the Trojan War. Mentor became Telemachus’ teacher, coach, counselor and protector, building a relationship based on affection and trust.

Mentoring today is synonymous with the process by which we guard and guide others. Mentors seemingly “adopt” those placed in their care.

It seems like a good idea to adopt these age-old ideas and help our employees along their career and life path. Specifically in the business world.

At its best, business mentoring is a process that activates the skills of the mentee within their current role and helps groom them for their next. Business mentoring helps them to produce high quality decisions that define them, their authority and their effectiveness. A business mentor provides a confidential sounding board, thinking room, and support for working through crucial and often complex decisions.

Business mentoring can also help organizations to retain their best people and increase staff loyalty.

I think that the quality that can be achieved in a business mentoring program would hinge on the expertise of those establishing the program in achieving the right fit between mentee and mentor. The best results will definitely be achieved when the mentor and mentee like and respect each other and where the personal chemistry is right.

A business mentor, by virtue of their experience, will be able to help the mentee steer through the organization. Perhaps more importantly, the business mentor will help the mentee to understand some of the more informal ways of getting things done and some of the unwritten and unstated ways of working (the world of corporate politics!), and therefore develop the mentee’s professional expertise and career.

Today, mentoring is being recognized as an important component of small business development. Many like myself see a void in the larger corporate business world and want to fill that void.

Mentoring uses the resources a company already has to improve employee satisfaction, develop leadership, and teach new skills.

Newswise says — Mentoring can be a powerful tool in introducing employees to an organization’s climate and help them progress in their jobs. It can be extremely beneficial to have someone who has your best interests at heart and can explain the facts of business life and offer valuable advice.
Informal mentoring has been going on forever, but companies are increasingly recognizing that formal mentoring programs can provide significant benefits for both the employee and the company, says Dr. Lillian Eby, an associate professor of psychology at the University of Georgia and an authority on corporate mentoring. 
Perhaps the most compelling reason to establish a formal mentoring program is that mentored employees have stronger commitment to the organization and are less likely to leave. “A key benefit of mentoring is retention. Turnover costs can be staggering. That’s one reason why organizations include mentoring programs as part of their business objectives,” Eby says.

Also, there is evidence that mentoring can lead to more satisfied employees, and therefore more productive and creative employees that will only add value to their organizations.