There are only three kinds of companies:
- Those that are growing at the right pace.
- Those that are growing too fast.
- Those that are growing too slowly (or not at all).
Any other kind of company will fail. If you are not growing, you are declining. There is no such thing as the status quo because even if your organization is not changing, everything else around you is. Your competitors are changing. Your customers are changing. Your people are changing. Your industry is changing. Your government is changing.
So you need to become a company that grows at the right pace. How do you know you are growing at the right pace? You don’t make stupid mistakes. The quality of your product isn’t declining. You are able to take advantage of opportunities as they arise. You don’t feel like you are always playing catch-up.
Toyota grew too fast and it led to millions of cars being recalled because quality was sacrificed. Blockbuster grew too slowly and it became obsolete because it ignored the messages that customers were trying to deliver. Procter & Gamble continues to grow at the right speed, which is why it has had such tremendous success for such a long time.
There are four stages of growth. Once you commit to growing at the right pace you will find yourself at one of these four stages.
Which stage are you at and what can you do to rapidly climb the stairs?
When you think of companies like Nortel, Enron, Blackberry, and Blockbuster, companies that were having tremendous success and then failed, there are only a few reasons why the sudden decline.
- Arrogance and/or stubbornness – The organization and its leaders believed that continuing to operate the same way would lead to continued success. They refused to change the way they operated.
- Inability to take advantage of new opportunities – The organization was either unable to see new opportunities or not flexible enough to take advantage of them.
- Increased distance from customers – The organization created too wide a gap between itself and its customers and wasn’t able to anticipate what customers wanted or needed.
- Misalignment of strategy and tactics – The tactics being performed on the front lines of the organization did not align with the strategy being developed in the executive boardroom.
- Greed – The organization’s leaders focused too much on creating money and power for themselves and not enough on creating value for customers.
Just avoid these five things and you will see continued success in your organization and operational excellence will come naturally.
I often talk about innovation and how if organizations are not innovating and adapting, the only news we will read about them is that they are bankrupt. So let’s give credit to HMV Canada for being innovative and recognizing that the world of music has changed.
HMV operates more than 100 stores in Canada, selling CDs, DVDs and other audio and video recordings. Today they launched a digital music service called The Vault. Users can sign up for a subscription based service to stream music (and eventually movies) or even download them to a phone or mp3 player. Bravo to HMV Canada for recognizing this changing customer need and doing something about it.
The president of HMV Canada, Nick Williams, said, “We absolutely believe we should provide people with music in any way they choose to experience it, whether that’s (to) download, stream it…or come into stores and buy it physically.” What an enlightened way of thinking.
This is a great example of innovating to meet new customer demands. It’s what Blockbuster should have done with movies (although Netflix is glad they didn’t) and what Indigo and Barnes and Noble should do with books (although Amazon is glad they didn’t).