Jim Hancock’s post on “Hollywood Faces the Music” got me thinking. In a Gallup Survey authored by Gary Hamel, author of Leading the Revolution, approximately 500 CEO’s were asked two questions:
Question 1: Who took best advantage of change in your industry over the past 10 years – newcomers, traditional competitors, or your own company?
Answer: Newcomers
Question 2: Did these newcomers win by executing better or changing the rules of the game?
Answer: 62% said changing the rules of the game.
Another definition of the “rules of the game” is “business model”.
Hamel explains that in 1992 the economic shelf life of a business model was 10-20 years. In 2002, it had been reduced to 5-8 years. And I sense that the shelf life is getting even shorter. How long have you been in business? Where is your business relative to its expiration date?
I worry nowadays when I interact with executives on matters of strategy. They typically say their problem is that they just have to execute better. They often elaborate that strategy is easy and that implementation is the hard part. Most of these same leaders believe that to compete you have to have deep technical knowledge of the industry that newcomers don’t have.
Hmm! I smell a vulnerable target that doesn’t see what’s coming. The newcomers see that the key to innovation is in new business models, not the technology or the expertise of the industry per se. They understand that it’s not the technology but the business model that uses the technology that creates the economic value. And because the newbies are not bound by industry dogma about how the business works, they develop innovative new models.
Does your dogma and beliefs make your organization vulnerable to disruption, even destruction by newcomers you can’t see because your beliefs cause you to disregard them? More than ever leaders must have a profound humility about the “rightness” of their ideas.
Lest you think this is a business issue alone, I think non-profits, educational institutions, ministries and political entities better understand their vulnerabilities.
More than ever what is important about an organization is the worldview, the belief system of its leaders. So what are you thinking?
