Why Don’t Companies Change?

Seth Godin writes “Do you have to be anti-change to be pro-business?”

He lists several companies that fought change (and government regulations) to preserve the status quo.

But my favorite part is at the end:

“The opportunities kick in when an external force requires a brand new story...

It's easy to argue against change. It disheartens shareholders and even employees. But external change is the most likely lever of growth, because it puts you back on the agenda of attention.” [Emphasis added]

Unfortunately, I think Seth’s right, external change is the likely lever of growth. Most companies want to ride out the current model until they’re forced to change.

Without a significant external force, they have no motivation to create change and often fight it when it becomes inevitable or is already present.

But why don’t we innovate and initiate changes ourselves?

Radical innovation or participation in emerging markets is unsure and requires experimentation. If a corporate culture is built on a well known market, long term experimentation is not the norm.

Failure is incorrectly defined as not attaining the expected results. It should be defined as not learning anything from an experiment or continually repeating the same mistakes.

Established companies have established processes and risk tolerances that are often not conducive to innovation.

Often companies attempt to use their current staff to come up with radical new products while requiring them to support existing products.

• Linkage to the current products and processes can constrain their ability to create something new.

• Radical innovation as a “side-job” is often unrealistic.

• Current staff has a vested interest in preserving the status quo.

• Staff may be “tainted” by their in depth knowledge of the current structure. At minimum, create a team that includes both people knowledgeable about the current business and those with radically different experiences – and put them on an even playing field.

Learning is uncomfortable. New product development is uncertain.

Anytime we need to change, we get scared and most of us run away until we have no choice!

Comments

[ann michael]

Nancy and Dave -

It's interesting how the external forces that Seth described (and I started to pick up on) were market forces that caused a company to realize that change was needed - and now the conversation has evolved to "external forces" from the outside in terms of people that are brought in to help effect that change internally.

Thanks for coming by and commenting!

Ann

[Dave Sovde]

Interesting topic. The few businesses that have built a continual dialogue about improvement into their culture, are the few that may not require outside assistance to change.

However, bringing an "external force" to a company is often a viable and profitable option because of the fresh insights, perspectives, and inspiration they are likely to bring to a company. And they know how to sell employees on the benefits of a new way to do things.

[Nancy]

Nice post. It's good that there are external forces that requires companies to change, otherwise they would be stuck without any development. Even though companies are not interested in risking their productivity with change, development is still an important factor.

[ann michael]

Great post, Dick. It's as if we're in a Catch 22 here. We must individually and internally decide to change and take action to do so - no one can convince or force us. Yet, the impetus for change is often an external lever - especially in the corporate world. It's very rare that one does decide that your distant ant hill is worth watching until they have an infestation!

[Dick Rowan]

Great post, Ann. Thanks to Seth for leading me to you. Thank you for inspiring me to post at my own blog.

My take on this: systemic change is indisputable, pervasive, and begins inside people and organizations. The illusion of stability and status quo results from having too limited a perspective, and too little time (or patience) to see the change happening. It’s like declaring a distant ant hill to be lifeless.
--Dick

[ann michael]

Helen-

Yes it is normal for us to protect our existence. It's just ironic that too much "protection" is what often causes our demise!

I suppose it's all in how we define our existence. Protecting our existing products and business models no matter what is happening in the world around us is probably not a good way to go.

Trying to insure our viability as an enterprise is certainly reasonable.

Thanks for commenting!!!

Ann

[Helen]

That's right. Making an internal change might result to failures and it's better if companies don't change. It's normal for companies to protect it's existence and prevent any failures.

[ann michael]

How true! I only mentioned that last part because sometimes companies do hire some people from the outside, but put them in subordinate positions with limited ability to impact decisions. So the usual suspects still have the reigns and nothing changes!

[Valeria Maltoni]

Good post, Ann. Yes, companies tend to make the effort only when pushed.

Ah, and who's going to hire the people who are different? And put them on an even playing field!