We have all heard the stories about companies who became household names but went bust (e.g. Blockbuster, Woolworths, Toys ‘R’ Us, Sears) and case studies have been written in abundance as to the reasons why these companies lost their way.
If Nokia had not been purchased by Microsoft for $7.6bn in September 2013, it too would, most certainly, be on the list of casualties. In fact, 2 years later, in July 2015, Microsoft wrote off the deal. An expensive mistake to have purchased a company that had lost its way despite being a market leader at one point, owning 41% of the global mobile phone market.
In most cases, these companies failed to see the changes that were staring them in the face and to act quickly. There was time for them to do “something” when the signals were apparent, but they all failed to do so, albeit for different reasons.
The Threat To Businesses Today
These days, change occurs much more quickly and disruption to the norm is happening at a rapid rate. There is less time to see what’s happening, let alone do something about it.
In short: companies can become marginalised very quickly.
With a rate of change that include a constant flood of new competitors, disruptive technologies, regulatory and environmental demands and the changing requirements of the customer, companies need to be more agile and adaptive to survive and stay ahead.
"Today, change occurs much more quickly and disruption to the norm is happening at a rapid rate. There is less time to see what’s happening, let alone do something about it."
The traditional approach of an annual strategic review will not help survival, nor bring competitive leadership.
This will simply fail to provide the agility companies need to make the changes necessary in today’s fast-moving world of business to make the strategic decisions that take the company forward.
Market Disruptions Go Global
Take a look at Uber and how it has challenged norms, markets, existing rules, regulators and disrupted the market.
Its competitors in the main, did not have time to react and those that did, could not compete with Uber’s technology and its financial strength.
In the Middle East, Uber’s main competition was Careem, a Dubai-based company with operations throughout the region, which decided to cash-in on a $3.1 bn offer by Uber in March 2019.
If it had not done so, it would have been only a matter of time before Uber succeeded in gradually expanding to acquire market share.
Another behemoth, Amazon, has practically taken over retail as we know it. Witness the number of high street stores that have experienced a significant downturn in sales or gone bust as a result.
In the United Arab Emirates, Amazon swallowed e-commerce site Souq.com in July 2017 for $580M to gain a foothold in the region.
Again, if Amazon had set up operations in the UAE and established a presence, would Souq.com have survived?
Finally, another interesting disrupter to appear in the market is Support Legal, a UAE based company that provides an online platform for experienced lawyers to offer fixed-price legal services for clients.
Their radical approach will put pressure on many legal services - particularly on the more transactional services (employment contracts, shareholder agreements etc) - adding to the commoditisation of these services and raising difficult questions for many firms in Dubai's already crowded legal industry.
Is Being Adaptable to Change Really Enough to Stay Ahead?
The simple answer is "no".
Those companies who have elected to remain reactive by instigating ad-hoc reviews of a strategic direction or business function, have found that their success is usually hampered by a number of vital missing ingredients.
They set out in the right direction, but their information gathering process is usually slow, manual, cumbersome and incomplete.
This affects every subsequent aspect of the ongoing process.
By the time any execution plan is implemented, the environment may have changed again, making any transformational gains marginal or even worthless.
The key is a systematic, proactive, adaptive and agile approach that generates results based on rapid identification of issues, followed by rapid deployment of solutions - and then repeating the cycle.
Sounds good in theory, but can this be achieved in practice?
Yes, it can.
Below are summarised 5 steps to this systematic approach.
Step 1: Establish a 'Rapid Baseline'
Establish a current organisational performance snapshot - which we call a “Rapid Baseline”.
This will allow the company to establish its performance from an inside-out perspective, highlighting strengths and weaknesses in the organisation.
A Rapid Baseline involves gathering a qualitative view of employee sentiment from various key business functions of the company (e.g. sales, marketing, operations etc) before converting this sentiment into quantitative data.
This valuable information provides companies with an overview from employees as to where and how the company is positioned competitively at any given time.
This gives a good indication as to how the company is likely to perform in the future.
Unlike historical data (e.g financial metrics) which provides trends based on trailing (or lagging) indicators, this approach results in the introduction of leading indicators into the decision making process for companies.
The combination of both types of indicators offer a more accurate and insightful prediction of future performance.
We use our “Accelerate Company-DNA”, which takes a matter of few days to gather and make sense of this data and convert qualitative sentiment into quantitative data.
When used in regular strategic review cycles, this not only provides the cadence necessary for the company to remain proactively agile and adaptive to changing conditions, but also gives benchmarking information against which companies can measure their business improvement efforts.
Step 2: Conduct Rapid Analysis
Rapid Analysis identifies areas of the business where a deeper insight will reveal more details identified from Step 1.
Our experience shows that companies often find situations where the root cause of their issues may be, for example, the incorrect alignment of the company’s products, services, target market or indeed the customer profile.
This may be different from the symptoms.
As another example: a company suffering from declining sales revenues may find the root cause of its issues not necessarily in the sales function (e.g the sales team), but in the competitive positioning of the product or service offering.
Step 3: Develop a Rapid Strategy
Focus on planning the highest priority strategic changes necessary to keep the company ahead of its competition.
There are usually a number of areas that need addressing, but it is important to focus on both high priority items as well as quick wins (where high value changes can be implemented quickly).
In addition, it is important to set Key Performance Indicators (KPIs) for the strategic change elements. Typically, a visualisation, such as KPI heatmap, would be used to show clearly which parts of the business require change to drive increased efficiency or competitiveness.
"Focus on planning the highest priority strategic changes necessary to keep the company ahead of its competition."
Step 4: Rapidly Execute
Perform “Rapid Execution” which involves deployment of resources (people, processes and systems) to make the identified high priority items from Step 3 happen quickly and effectively. Identification of skills gaps and knowledge-transfer requirements are key to successful execution and often overlooked.
The execution process should involve key stakeholders involved in the change management and implementation process to ‘own’ and lead a rapid deployment team to meet deadlines and deliverables.
"Identification of skills gaps and knowledge-transfer requirements are key to successful execution and often overlooked."
Step 5: Monitor and review the effectiveness of the changes
Repeat the process of the “Rapid Baseline” on an ongoing basis.
This will give a benchmark data from which the company performance can be measured from previous iterations.
From a personal experience of dealing with numerous client situations, the biggest challenge for companies is to get started! The pain of gathering of information from within their business quickly, effectively and in a meaningful way to then move to the next steps confidently is the typical impediment to get started.
Establishing a current organisational performance snapshot (Step 1: Rapid Baseline) is the key to being able to measure the ‘pulse’ of the company and then subsequently working through the other steps.
Adding regular ongoing evaluation of the health of the company or division with innovation as a fabric of the organisation, ensures that companies are equipped with the visibility, agility and adaptability to compete in this highly competitive and disruptive world in which we live today.
Zag Asghar is Managing Partner & CEO of PREDIXA
PREDIXA helps business leaders to make more effective strategic decisions by rapidly analysing their organisation and pinpointing key issues for remediation using its powerful AI-based Dynamix suite of business applications for predictive analysis.
PREDIXA has its HQ based in Emirates Towers, Dubai, United Arab Emirates