Some of the best business ideas have come out of economic recessions, as entrepreneurs challenge old ideas to find new markets. “Survival of the fittest” is a phrase that originated from Darwinian evolutionary theory and in that sense, now is the time for bravery, vision and material positive disruption. Organisations that successfully adjust to the current environment stand the best chance of survival and the ability to expand.
British Petroleum, the global petroleum giant, is currently in the news, announcing high levels of redundancies and significant refocusing to renewable energy further confirmed this week with the sale of their petrochemicals business. I find this frustrating, however, as it seems so late in the day. BP had the assets, resources and engineering head start to have ‘owned’ the clean technology sector since the early 2,000s. As early as 2003 they changed their slogan to ‘Beyond Petroleum’, yet their fossil fuel extraction investment has been far higher than their biofuels investment, even into 2019. Should it have taken the downturn in oil prices to finally create the tipping point for them to disrupt their company habits and look at the new and what is now a crowded cleantech market?
I would suggest that it is a repeat of the legend when IBM worked with Bill Gates on coding for an operating system. They left him with the software licensing as they felt hardware was the future. To be fair, software sales were tiny and hardware for them was global; however, they failed to see the future. So, why is it that even when executives at heart ‘guess’ the future they do not make the brave decision to positively disrupt, that is, adapt the business model to new markets? I would suggest that there are five main drivers:
- Most executives are managers paid to ensure reliability not change.
- Positively disrupting the business model is risky, painful, and contentious. It often requires you to compete with your existing business.
- If you are well paid, why rock the boat? This is the vested interest of the status quo.
- Shareholders like safe horizons of five years’ duration, not ten, yet disrupting markets takes ten years.
- Management, not leadership. Leadership requires you to be ahead of your competitors and to anticipate the business needs. Managing the many day-to-day operational changes requires time to think big and be brave and the courage to have the tough conversations and thus adapt ahead of the market?
Taking decisive action and having a positive CEO does not require a ‘saviour’ CEO, they often just need to be a great listener to understand the best strategy. Kimberly-Clark is a great example of this. In the early 1970s it was struggling as a paper company when Darwin E Smith was named as CEO; that is a great first name in this day and age too. He is not famous because he was shy and mild-mannered, he transformed the business. Amidst much criticism, he and his executives announced that they would sell the paper mills and that all proceeds would then be thrown into developing consumer brands. Today, these brands include household names such as Huggies nappies and Kleenex tissues.
So, what can you do? Get objective help. I am not talking about mentors or specialist consultants with expertise in a specific sector. I am talking about employing ‘punk’ consultants. Counterintuitive challengers, brave enough to say what they think beyond the day rate, yet with the acumen and style to understand your business and help you positively disrupt. Avondale work with several of such world-leading consultants. Getting a second opinion will not bite and the investment is easily offset by the fresh perspectives in these truly Darwinian times. Even if you do not get help, the pandemic is a great accelerator, so now is the time to listen to your rebels. These are the customers and employees that challenge you and may, therefore, be the source of some positive ‘survive to thrive’ ideas. Be brave and bold, even if you do it quietly.
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