You're driving down an unlit road on a moonlit night. Suddenly, a fox jumps out and is caught in the beams of your headlights. What happens? Typically, the animal just freezes for a few seconds, then it starts running along the road just a bit ahead of you. Once it figures that it can't outrun your car, it jumps out of the road, and presumably breathes a sigh of relief at its escape from the strange monster.
Sometimes companies behave in the same way while facing a totally unforeseen crisis. First comes the freeze, while the magnitude of the crisis and estimation of disaster and damage takes place, while the crisis looms even closer. While this is happening, things go on as usual, perhaps in the hope that the crisis will pass, it isn't a real threat to business, there'll be a solution round the corner, etc.
An good illustration is the Blackberry story. In 2009, it was the second most popular phone after Nokia (and that's another story) and now it's consigned to history. The hyperlinked article mentions that Blackberry launched a modern touchscreen phone in 2010, three years after the iPhone came on the market. Death freeze!
What do we do when we're about to be hit? We make ourselves as small as possible so that the area of impact is lessened - the passenger manual on any aircraft advises us adopt the brace position when an aircraft is required to make an emergency landing on land or on water, making us as small as possible in the seat.
A company 'sizes down' when it's survival is threatened. Not only does it shed people; it sheds activities that are non-essential to its survival. It sells of non-core businesses, it keeps only its cash-cows. If product and/or process innovations are key in its business, it will run a R&D effort as best as possible - in any case, most of its best talent will find greener pastures.
I'm curious to find other such examples of parallel patterns of behaviour, and not just in response to threats, so right now, Google search beckons.
Sometimes companies behave in the same way while facing a totally unforeseen crisis. First comes the freeze, while the magnitude of the crisis and estimation of disaster and damage takes place, while the crisis looms even closer. While this is happening, things go on as usual, perhaps in the hope that the crisis will pass, it isn't a real threat to business, there'll be a solution round the corner, etc.
An good illustration is the Blackberry story. In 2009, it was the second most popular phone after Nokia (and that's another story) and now it's consigned to history. The hyperlinked article mentions that Blackberry launched a modern touchscreen phone in 2010, three years after the iPhone came on the market. Death freeze!
What do we do when we're about to be hit? We make ourselves as small as possible so that the area of impact is lessened - the passenger manual on any aircraft advises us adopt the brace position when an aircraft is required to make an emergency landing on land or on water, making us as small as possible in the seat.
A company 'sizes down' when it's survival is threatened. Not only does it shed people; it sheds activities that are non-essential to its survival. It sells of non-core businesses, it keeps only its cash-cows. If product and/or process innovations are key in its business, it will run a R&D effort as best as possible - in any case, most of its best talent will find greener pastures.
I'm curious to find other such examples of parallel patterns of behaviour, and not just in response to threats, so right now, Google search beckons.
1 comment:
Thanks a lot Jayanta Sengupta. Very insightful. If one really examines it, there are two opposite states for “everything”, be it any living being, insect, animal, human being, or a company, nation (which are supposed to be 'living entity'). That is the ability to anticipate, look ahead and/or react.
Any analysis explicitly demonstrates this. E.g., it is really tragic, that even smart/intelligent animal like elephants very often get hurt/killed on the road, railway tracks etc. Perhaps they are not conscious or are ignorant of the "incoming dangerous signals". (Am not sure of their cybernetic skills).
Companies also behave in a similar way. So the critical and vital capability is to Anticipate the "interruption" and "disruption" and not just focus on Opportunity and traditional/obvious competition. Disruptive technologies have proven this very well.
Of course in all this there is always the Key Differentiator between "Risk" and "Uncertainty".
Thanks again for excellent piece.
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