A traffic jam is an interesting phenomenon. A traffic jam at a robot intersection can last for hours ,and will test the patience of the most resilient driver. If you are a pedestrian and you observe such a traffic jam, you will wonder why the traffic is not moving, why people are not giving each other way and why more and more cars keep coming , even though the problem can be seen from roads away and why they keep using that road everyday with the same result.
A recent encounter with such a traffic jam got me to thinking about organisations and how companies fail to perform because they have become stuck in a rut for too long.
Why do organisations get stuck in a rut?
The CEO/ Board don’t really want a new business model.
The top excuse that you hear from marketers when talking to them about implementing new ideas is that “my CEO will not take to the idea. “ It seems that CEOs are to blame for organisations failing to adapt to new technologies, new business models, new products and new marketing strategies. While this may be sweeping all executives with the same broom, many senior executives (and staff) who have been in their organisations for too long and or have done the same job for years usually become comfortable with the status quo, even if at some point ,this is no longer customer centric. Adopting new business models, new technologies and new ideas may also be a risk that some executives are not willing to take, to the detriment of their companies, staff , customers and shareholders, because, should the axe fall, it may fall on their necks.
The future of the business is the next CEO/Board’s problem
Sad as this may be, it is unfortunately true. While executives do not want to preside over failing companies, sometimes the unthinkable happens. Companies start to totter , the chequebook does not balance, products stay too long on the shelves and talented employees see the signs and leave the burning ship. Instead of finding a way of fixing the problem, the incumbent CEO/Board, tired of trying to make ineffective recovery strategies work, simply gives in to the inevitable (but avoidable). A golden handshake later, and the problem becomes someone elses.
There is No learning culture in the company
The company’s personnel does not seem to have a learning culture. The company does not learn from customer insight, nor does it seek it. There is not strategy for documenting what staff, customers or the company’s stakeholders are saying. The countless number of feedback channels that are available to the company, such as the simple till slip, focus groups, sales statistics, external research, customer complaints etc are not utilised.
They shoot creative employees here, don’t they?
There are many organisations where staff fear to speak openly about any new ideas they might have , in case they are labelled as rebels and instigators of unwanted change by their colleagues. Such companies thrive on mediocrity, on doing what other companies are doing and are quite happy to compare themselves with “everybody else in the market.” In these companies, new ideas are not tolerated. Supervisors do not want to feel upstaged. Staff blame everyone but themselves when things start to fail and no one realises that they are there to make the difference and to create exciting products and services for customers.
“Yesterday” is your today
Companies that are stuck in a rut constantly think about how things “were”. They miss the triumphs and victories of yester year, when their products were the talk of the town, their customers were the “preferred brands”, the cash cows of the organisation, the market leaders etc. They fail to realise that times have changed, customers have changed, technology has progressed, and, well, their company’s products are or have become irrelevant.
You are not in step with your customers
Companies that do not keep up to date with their customers’ wants and expectations and the direction of technological change will ultimately lose those customers. Market research in a great tool for getting to know what your customers want and what they think about your business. Yet many companies do not bother. There are many ways that companies can find out what their customers want, what the market wants, what the competition is doing. Many of these methods are right there in the company. Organisations do not have to pay a fortune for customer and market research. Many companies are sitting on invaluable and huge amounts of information just from their daily customer contacts , front service staff and customer transactions.
Everything should be measured, shouldn’t it?
We all know that management saying “what get measured , gets done” Well there are things that are valuable but that cannot be measured using financial analysis, models, ratios and so on. A smile on a satisfied customer’s face cannot be measured in figures, but you can certainly see it, you can feel the warmth of the gratitude on a community member’s face and you can read the praises on your online network page. Not all things that matter can be measured therefore for many companies, new ideas will be out rightly dismissed because they do not conform to the standard financial models that companies use.
New marketing ideas do not see the light of day
Organisations fail to implement strategic plans because the plans never make it from the Boardroom to the shop floor. While admiring the magnitude of their problems, managers fail to muster the courage to implement the solutions to the problems. Implementation plans are not done, there are no strategic plan evaluations, and nobody seems to be accountable. Because these things are not done, even new problems that arise during the year fail to get the attention that they deserve until the smoke becomes a burning inferno.
New technology is deployed only to lower the costs of production
Many company prides themselves on the new technologies that they invest in. And why not! Recapitalisation is expensive. Newsletters are sent out to staff and customers to announce the new acquisitions, the media is called to the launch of new production lines and everybody is happy. But wait a minute. The only reason why the organisation bought the technology in the first place is so that they can produce the same irrelevant , out-dated products and services at a lower cost. Possibly at the cost of employees’ jobs as well.
The product is king
As long as the production line happily humming, shunning and buzzing, staff are happy and talk about high production capacity utilisation. But is what is being produced wanted by their target market? In fact does the company have a market for its goods and service? Many companies are concerned about products but not about the attractiveness, desirability, quality and relevance of their products in the environment and markets that they are doing business.
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