By Ian Lavis on behalf of Praxity Global Alliance
Digital disruption is increasing the speed in which businesses become irrelevant. There’s no magic pill for longevity but there’s a lot you can do to make your organisation more resilient.
No business is immune. The speed in which an organisation can go from global leader to irrelevant entity is remarkably quick – and getting quicker.
Research into corporate longevity in the US from disruptive innovation consultancy Innosight shows the average tenure of S&P 500 companies will grow shorter and shorter over the next decade. In 1964, companies lasted an average of 33-years on the S&P list, reducing to 24 years by 2016, and this is forecast to shrink to just 12 years by 2027.
About half of S&P 500 companies are expected to be replaced over the next ten years. Why the fast turnaround? Irrelevance. The organisations that drop from the list will have become irrelevant by not adapting to digital transformation and a fast-changing business landscape. The same can be said for workers who don’t adapt to change.
Unrelenting pace of change
Albert Primo, Technology Development Principal and Chief Innovation Officer at Praxity participant firm Kaufman Rossin in the US, says the “unrelenting pace of technological change, coupled with new business models driven by generational shifts” is accelerating irrelevancy of both organisations and workers. The solution, he says, is a change in mindset: “Companies and workers alike must rethink their purpose, adopt a growth mindset, and find ways to learn on a continual basis.”
Companies with relevancy at their fingertips have often failed to grasp it, Albert says. He cites the example of Blockbuster, the global video rental chain that dominated in the nineties. Netflix founder and CEO Reed Hastings is said to have hatched the idea for Netflix after being fined for the late return of a video in 1997. “Whatever the truth of its origin, when Netflix’s business model began to take hold in the early 2000s, they offered to sell to Blockbuster for $50 million. But Blockbuster declined, convinced their business model would maintain its power.” The video rental company filed for bankruptcy in 2010 while Netflix now has a market value of over $160 billion. The speed of Blockbuster’s slide to irrelevancy was just six years.
The speed of irrelevancy is defined as the length of time it takes an incumbent to lose relevancy in the face of a new entrant, technology or business model. To calculate it, take the date of bankruptcy or dramatic, continuous decline in annual revenue growth (10% of more for three consecutive years) and subtract the date a new player began to take substantial market share.
Five ways to protect yourself from irrelevancy
The question of irrelevancy is not a matter of if but when, Albert insists, if organisations fail to adapt to new entrants or capabilities. But we can all change our professional fate. In an article first published by Kaufman Rossin, Albert lists five steps to protect from irrelevancy:
- Adopt the proper mindset
Stanford Professor Carol Dweck identified two dominant mindsets that help determine people’s success. Those with a fixed mindset view talent and knowledge as innate gifts – you’ve got it, or you don’t. They feel threatened by the success of others, avoid criticism, and shy away from change and challenges. In contrast, those with a growth mindset believe that their learning potential has no limits. They embrace change and feedback, thrive when challenged, and are inspired by the success of others. They see change as an opportunity to grow and succeed. An entrepreneurial mindset, where your ideas can be monetized, and an augmentation mindset, provide further protection against irrelevancy.
- Learn to learn
Openness to expanding self-knowledge is key. In the Future of Jobs Report, the term ‘upskilling’ (learning or teaching workers new skills) appears more than dozen times. Our relevancy is built upon what we know today, but more importantly what we will know tomorrow. Acquiring or furthering skills in the following areas will prolong worker relevancy:
- Automation and artificial intelligence
- Big data analytics
- Digital trade
- Machine learning
- Quantum computing.
- Find a place that aligns with your purpose
CEOs worldwide have begun to talk about corporate purpose that goes beyond shareholder value. In some cases, they have adopted values-driven missions, identifying change they want to see in the world as a goal that complements their profit targets. If you’re a little jaded you might see this as another clever marketing scheme, but Larry Fink, CEO of BlackRock, believes it’s more than that. “Purpose is not the sole pursuit of profits but the animating force for achieving them,” he says. “Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked.” Research shows that finding work meaningful keeps employees satisfied. If you are driven by the need to make your world better, finding a cultural fit in your workplace goes a long way to inspire you to fend off irrelevancy, and really contribute to that future.
- Succeed at failing
Somewhere along your journey to remain relevant, you will fail. This is normal. View it as a temporary setback, an opportunity to learn from mistakes, a chance to pivot and take another approach. Children are taught that failure is always bad. In school if you get a failing grade you may get punished by your parents; in sports if you lose a game you may be screamed at by your coach. But adversity is a path, sometimes a necessary one, to future success. Failure, as unnatural as it may sound or feel, is a part of success. Finding ways to fail fast-but-smart is key. As IDEO partner Tom Kelley said, “Fail often so you can succeed sooner.”
- Be Agile
Many of the world’s largest tech and software companies, such as Google and Microsoft, leverage a project management methodology known as Agile. Within Agile there are many different frameworks, but they all have the same goal: drive the highest amount of business value to the customer in the shortest amount of time. In Scrum, one of the most popular frameworks, projects are broken down into sprints, iterative bursts of creativity and collaboration that range from one to four weeks; large projects that can’t be completed in a sprint or two are known as epics. Looking through an Agile lens, your life is an epic. Plan the project, chart the steps to your future self, and execute your plan in sprints. Being nimble and making tweaks along the way is part of the journey.
View change as an opportunity
The need to be resilient is more important than ever. Organisations and individuals alike must be prepared to constantly evolve to remain relevant. With the proper mindset, Albert says, change becomes an opportunity rather than a threat. When this is combined with an ability to continually learn and an agile approach to business that aligns with a strong corporate purpose, “you can position yourself to succeed” in the new digital world.
This content is based on an article by Albert Primo, Technology Development Principal and Chief Innovation Officer at Kaufman Rossin. Please click here for the original article.