Businesses appear to have a lifespan and it is only very powerful and agile businesses that survive through a paradigm shift. A fine example of failure is the American rail road businesses who believed they were invincible in the rail business rather than flexible in the transportation business! Woolworth’s once one of the UK’s strongest retailers suffered in the same way. So why do businesses only last so long?
Look at football clubs, the only ones recently who have had longevity are Manchester United and Liverpool although Liverpool’s glory days were along time ago. Are Manchester City and Chelsea future proof or just riding on the crest of a wave provided by a rich benefactor. What are the ingredients for longevity?
Having a strategy is key to longevity as it defines an organisations destiny, Key to strategy is vision which is an ability to assess where to position now for the long haul whilst identifying where the long haul leads. Vision is key in any strategy and unfortunately as businesses get entwined in the economics of the here and now vision is rarely evident in organisations. With vision comes risk management, an organisation has to identify the threats that will challenge it on its journey and manage those challenges until they are small enough to deal with. Talent management is another key part of strategy particularly the development and retention of high performers. Organisations that map out their destiny using strategy shape themselves and their environments to achieve. Businesses that don’t have a strategy will hit the wall.
When businesses are small and easy to control processes are less important, however as a business grows processes become more and more important as they allow leaders and managers time to focus on strategic rather than tactical issues. Time spent in the weeds reinventing the wheel is ill spent time and costs businesses, however if processes are put in place and control delegated senior members of a business can begin to map out and shape the future of a business. Small businesses that remain without processes remain tactical, waste time and hit the wall.
Review and renewal are key to development just look at the Manchester United story when players such as Paul Ince, Roy Keane, Eric Cantona and David Beckham were sold or moved on to be replaced by fantastic talents. Manchester United are not afraid of renewing when necessary without sentimentality. So should a business be when necessary after all a business in only in business to satisfy its customer’s needs rather than its worker’s needs. Businesses need to know that they match their customers needs and regularly review their relevance. Businesses that are too internally focused and sentimental will hit the wall.