Many businesses have a relatively steady current course and speed. This may be steady growth of 0.1 per cent, 3 per cent or more. It may be selling the same products to the same market. Or it may be a business model that has not changed for many years.
In the past this may have been acceptable. However, in today’s world the rate of change has accelerated. New technologies are enabling new business models and, in the context of a tough economy, relying on the old ways – even if they are tried-and-tested – may leave you open to attack from more nimble competition.
I believe that to break out of the current course and speed, business leaders should identify and challenge their organisation’s deeply held orthodoxies.
But can it be done? Can people be moved from their comfort zone when shareholders and stakeholders have to be appeased? Some of my favourite examples from across industry sectors suggest they can.
Take the car rental market place as one example. Renting cars used to have one model. You walked into a rental car office, waited to speak to a smartly dressed employee, signed some forms, took the key and drove away. Zipcar brought to life a very different model. Now it’s possible to book online or by phone, walk to where the car is located, open the car using a RFID-enabled membership card and drive away. The orthodoxy of having a rental car office with smartly dressed staff can be discarded.
A little bravery goes a long way and the right idea at the right time can be a force for good
For hundreds of years consumers paid for newspapers and magazines, typically from newsagents. Today the London Evening Standard and Time Out, the Metro newspaper in many cities, and many other journals are free. They are usually handed out at stations to young urban commuters, an attractive demographic. This showed the orthodox thinking that journals had to be paid for was not necessarily true. The change also highlighted an alternative, and cheaper, distribution model.
Raising funds for a brand new start-up is not always easy. Traditionally one-on-one meetings to persuade family, friends or other individuals were required. An obvious limitation was how many people the entrepreneur could meet. Crowdfunding sites, such as Kickstarter, Crowdfunder, Indiegogo and many more, have blossomed. These allow individuals or teams to raise funds for projects using the power of the internet to reach millions of people. Possibly the best recent example is the Pebble Watch which raised more than $10 million from more than 68,000 people on Kickstarter. The orthodoxy of having to have endless face-to-face meetings to raise funds has gone.
And if you really want food for thought, until relatively recently only established shops, restaurants and the like were able to accept payments by debit or credit cards on relatively bulky terminals. Small plumbers, stalls and other very small businesses could only accept cash or cheques. Square created tiny, and incredibly cheap, card readers which could be plugged into a smartphone and allow just about anyone to set themselves up in business and accept debit and credit card payments. The orthodoxy of it being too difficult and relatively expensive to accept credit and debit card payments has been destroyed. Additionally, the barriers to create small businesses have been further reduced.
These examples illustrate the impact of confronting widely accepted and deeply ingrained orthodoxies, and breaking out of accepted current courses and speeds. They demonstrate that a little bravery goes a long way and they show that the right idea at the right time can be a force for good.
It may not be easy, but there are three steps to this process for any business.
To begin with it is important to use a mix of staff to identify as many orthodoxies as possible. The examples above show these may relate to customer acquisition, financing, R&D, where employees are based and any business process or operating model. The key is always including the areas everyone assumes cannot be changed.
It’s also essential to challenge these orthodoxies in workshops with the objective of identifying opportunities for the business. This can be tough as it may seem like driving against long-held views of the business or even the markets in which it operates. Look to other businesses which you admire for inspiration. Ask yourselves what would the business do if you broke one of the orthodoxies? Think about how cloud and mobile are changing the way business and markets operates. Ask yourselves what new competitors have appeared and what are they doing differently?
The hardest part is prioritising the opportunities and creating actionable plans for the best ones, which are then baked into the overall business plan. Holding people to account for execution of strategy is key to converting interesting discussions into a measurable shift in your current course and speed.
You could take the view that this all sounds too difficult. In which case, think of Horatio Nelson, who said: “Let me alone: I have yet my legs and one arm. Tell the surgeon to make haste and his instruments. I know I must lose my right arm, so the sooner it’s off the better.” It may well be difficult and it may well be painful but, for most of us, it is a critical step.
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