Anticipating and exploiting change is the key to success in the twenty-first century. You need to recognize the signs of change early and then develop a timely strategy to cope with it. You must also make sure you carry people with you in the transformation of the organization.
Profiting from paranoia
Whether or not you agree with Andy Grove's maxim "only the paranoid survive", the thought is a powerful tool for effective management of change. Strictly speaking, paranoia is a delusion: but the existence of competitive and other threats, whatever your industry, is likely to be only too real.
Take your guide from what is happening in the present and forget what has happened in the past in your business, which may be wholly irrelevant. Fight against the tendency to stick to the business and the methods that have sustained your fortunes for so long.
Avoiding denial
The opposite of healthy paranoia is unhealthy denial. Change that comes in the form of bad news tends to be denied. To avoid the denial trap, analyze your response honestly and rationally.
Dealing with Bad News
Do I want this news to be wrong?
Is that why I am denying it?
Or have I conducted a thorough, dispassionate analysis that shows it to be wrong?
Either way, what will be the worst possible result if the news is right and I have done nothing?
What action can and should I take if the news is right?
What is the worst possible result of that action?
What is the best possible result of that action?
Rational evaluation of a possible threat as soon as it appears will undermine false optimism and demonstrate what risks you are running through denial and inaction. Remember what Andy Grove has written: "Looking back over my own career, I have never made a tough change, whether it involved resource shifts or personnel moves, that I haven't wished I had made a year or so earlier."
Look back over your career. Were there any events of which you would say the same as Grove? Ask yourself why you delayed. Almost always, the answer lies in your emotions; for example, fear of confrontation or fear of being wrong.
Shifting resources
The critical moment comes when you must commit resources to a new strategy. There are dangers to moving either too early or too late, although acting too late incurs the greatest penalties.
Resource Shift Dilemma
Resource shift is premature
Previous task is not completed.
Timing of shift is right
Momentum of existing strategy is still positive; threat has been verified.
Resource shift is late
Opportunity for transformation is lost; decline may be irreversible.
The penalty of lateness is very possibly fateful. Proceed on the paranoid assumption that you will never catch up, which will almost certainly be true. Conversely, you probably can turn back and repair at least some of the damage done by shifting resources too early.
Playing Catch-up
IBM launched its mini-computer 14 years after Digital Equipment created the market. It launched its personal computer four years after the Apple II.
In both cases the IBM products were very successful - with the PC remaking the market. But when IBM came five years late into the lap-top market, Toshiba was the strong leader in a market already worth $6 billion a year. With an excellent product, IBM thought it would again catch up. It never has done - and probably never will.
