My leadership training classes often include the topic of organizational change. This is because change in organizations of all kinds is ubiquitous these days. All three of the companies by whom I was employed earlier in my career experienced fundamental change. In all three cases, my team and I helped to carry out that change. After starting my consulting business in 1998, most of my clients have experienced change of one kind or another. But, what happens when companies don’t change when they should?
Most of us resist change.
As human beings, we’re not wired to quickly and easily accept change of any kind. An instructor in a seminar on this subject I once attended said we all have a fundamental fear about change. That fear is that, once the change is complete, we won’t have what it takes to deal with the new, changed circumstances. That we’ll be inadequate. That we won’t measure up.
Organizations suffer from a similar reluctance, but for a somewhat different reason. They become accustomed to the known, the comfortable, the familiar. If they have been successful for a long time, they fall into the trap of assuming that they will be successful in the future. All they have to do is to just keep on doing what they’ve always done. Of course, this mindset ignores that the world is changing around them. So are their markets. And their customers.
What happens when companies don’t change when they should?
There are many examples. My favorite three are as follows:
- The Swiss watch industry once had 80% of the world market in watches. They ignored the invention of digital watches, saying they were toys, a fad, devoid of craftsmanship. They ignored the trend, while others exploited it, and today they have less than 10% of the world market.
- Kodak once owned the consumer camera and film market worldwide for more than 100 years. George Eastman invented the first simple consumer camera in 1888. Kodak ignored the development of digital cameras in the 20th century, and today are out of the consumer camera business altogether.
- After 146 years in business, Ringling Brothers Barnum & Bailey Circus folded their tents permanently in 2017. They had failed to hear the message from critics of their animal policies for too long. Ticket sales suffered, even while competitors like Cirque du Soleil flourished.
Leaders must recognize and embrace organizational change when it is necessary in an ever-changing world. Adapting to the change won’t be easy, and it won’t be quick. Companies are made up of people, after all, and most people resist change.
So, what happens when companies don’t change when they should? Their leaders put them, and their stakeholders, in peril.