In an environment of rapidly increasing complexity, it’s critical to consider how the seemingly minor changes inside and outside your company can accumulate to the point where they may have unanticipated, yet game-changing effects.
What are the minor changes to which we’re referring? They can include minor shifts of workforce within a department, or several changes of customers, suppliers, or alliance partners. They can also include small changes in industry regulations, and other shifts that, in of themselves don’t make the news. However, the interaction between multiple minor changes can have a major impact on your company’s ability to achieve its objectives.
For example, when executives of one of our clients assessed minor events that had occurred in the previous six months, they listed a series of small shifts in workflow that occurred with staff turnover, several new contacts at suppliers and customer companies.
None of these changes were major events by themselves, but their cumulative effect was surprisingly strong. Some jobs had become redundant with even a tiny shift in workflow, necessary functions were now missing, and work practices that had once been well suited to the organization’s needs were no longer adequate to work effectively with the new supplier contact and meet the demands of the new customer contacts.
In many respects these minor changes seemed inconsequential since they happened relatively slowly over time. However, without knowing it, the company had slowly changed and lost its effectiveness to the point where their growth strategy was seriously threatened.
While “big data” software applications can be useful in sorting through the complex noise of the business environment, leadership acumen can’t be replaced when it comes to recognizing and acting upon big challenges and opportunities posed by seemingly minor unrelated changes.
To this end, every leader needs to be able to identify relevant information about what is and is not changing inside and outside their company, recognize subtle yet significant patterns in seemingly unconnected events, and decide what shifts in strategy or operations are needed to effectively adapt.
With no major triggering events to make you look for these changes, it’s essential to ask the right questions to surface these issues frequently enough to allow timely and effective response to both risks and opportunities.
Questions to focus on include:
⇒What changing patterns and trends can you observe? Sometimes seemingly unrelated small issues can have common roots or cumulatively lead to a major change. For instance, a key supplier for one client had changes in delivery times, policies, and contacts over the course of six months; the client realized that taken together, these changes required them to more actively manage the supplier relationship to ensure that they met their obligations. Remember to look within your organization for changing trends among the workforce
⇒What forces are driving these changes? As important as it is to detect what is happening in your business environment, understanding the “why” behind minor shifts can be invaluable in determining whether there are new opportunities, whether there’s a major risk, or whether making a slight adjustment is the most appropriate response to the changes.
⇒What are the potential opportunities and risks? Using the first two questions as a foundation for identifying underlying implications and potential impacts on your business, you may discover issues that signal new opportunities on the horizon (such as new capabilities that your organization has unexpectedly acquired), or a need to take preventive action to avoid problems ahead (such as a gradual shift occurring with your customers).
For instance, we worked with a client company whose executive team observed a potential connection between a number of minor changes to regulatory issues, as well as some shifts in consumer demographics and needs. They determined that these issues collectively signaled the beginning of a major change that would impact the claims they could make for one of their most important products.
Rather than wait for this trend to escalate and have a major impact on their product’s position in the market, they decided to develop additional claim support to capitalize on previously un-emphasized benefits of the product. At the same time, they modified the focus of product development to take advantage of positive aspects of the consumer trends. This became the impetus to generate new claims for their product that were worth millions of dollars.
The Bottom Line:
The decision of when to take early action on emerging trends is part art, part science, and can require looking beyond “usual” sources of information. Uncovering the causes and implications of these events and deciding when it’s appropriate to take action based on your company’s individual risk tolerance, culture, strengths, and vulnerabilities is the real key to increasing your company’s agility and competitive edge and keeping your strategy relevant regardless of the road ahead.
About the authors:
Pamela S. Harper is the Founding Partner and CEO of Business Advancement Inc. (BAI), based in Glen Rock, NJ. She is an internationally known business performance expert, author, and professional speaker with over 20 years experience in internal and external consulting to entrepreneurial, middle market, and Fortune 500 companies in a wide range of industries, all going through extraordinary growth and change. Pam is the author of the critically acclaimed book, Preventing Strategic Gridlock®: Leading Over, Under & Around Organizational Jams to Achieve High Performance Results. She has published and been quoted in prominent media outlets including: BusinessWeek, Investor’s Business Daily, Red Herring, Entrepreneur, Forbes.com and major newspapers around the world.
D. Scott Harper, Ph.D. is Sr. Partner and COO of BAI. He is a globally recognized expert in innovation processes and systems with a unique ability to translate technical insights into desired business results, gained from over 20 years of leadership experience in Johnson & Johnson Consumer Company, Pfizer Consumer Healthcare, and Warner-Lambert Company.
Since 1991, Business Advancement Inc. has enabled companies of all sizes, representing a wide range of industries, accelerate their growth and profitability − in any economy.