Friday, January 16, 2009

Inside Fast Growth Technology Companies

Eight keys to thriving in a turbulent economy

Video Gallery

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A warning to fast growing technology companies: Sticking steadfastly to how you currently operate your business will undoubtedly lead to your demise.

Hot products, skyrocketing sales, and the excitement of feeling like the hottest thing since text messaging can lead companies into a false sense of security. Many veterans of Digital Equipment Corp. and Polaroid Corp. remember feeling invincible and immune to significant changes in the marketplace (i.e., the growth of the desktop PC and digital photography). Eastman Kodak almost succumbed, but righted itself by leading the way in digital cameras and image management.

The ability to adapt to change, as famously stated by Charles Darwin, is more important to survival than strength or intelligence. Apple Inc. and IBM Corp. have shown long-term success by sticking to core principles while evolving to meet the changing needs of customers.

Today, the spike and fall of the price of oil and the paralyzing financial crisis are examples of how dramatic changes can shatter the prospects of even the fastest growing companies.

To survive, organizations must contend with changes in the global economy, from their competition, and in customer preferences. Yet most organizations conduct business as though their  environment will remain stable. They do this at their own peril. Organizations exhibit inflexibility in five ways:

• Investments. They make long-term investments in resources and people that lock them into doing business in a consistent manner over time.

• Planning. They fail to monitor their environment to detect changes that could dramatically impact them.

• Structures. They perpetuate the status quo with rigid internal structures to control costs and day-to-day operations.

• Hiring. They hire industry-grown managers who often suffer from myopic thinking and a lack of creativity.

• Leadership. They are locked into traditional leadership styles that don’t value anticipating changes, empowering people to participate in change, or developing a sense of shared purpose.


WHAT TO DO

1) Constantly scan your environment. Involve all employees in scanning all facets that may impact on your organization.

2) Discern your core identity. Pursue changes that are consistent with your organization’s key values, mission, and bedrock identity.

3) Maintain a readiness to change. Develop proactive, ongoing processes for sensing the environment,  and anticipating  future scenarios.

4) Develop a new vocabulary. Instead of developing a fixed “strategy,” constantly “strategize.” Hire employees who constantly evolve new approaches for providing value to customers.

5) Replace rigid structures with fluid processes.  Help people contribute in as many ways as possible. Assemble teams as needed to work on projects, and change the composition of these teams as the need for ideas and resources change.

6) Stay light on your feet. Optimize your flexibility by renting space and equipment and hiring some employees on a temporary basis.

7) Hire differently. Instead of hiring experienced veterans in your industry, hire people from other industries who see the world differently, or employees who have demonstrated that they are “early” rather than “late” adopters and embrace change.

8) Develop an agile leadership style. Instead of directing employees, empower, involve, and collaborate with them.

Fast-growing companies cannot be complacent. They need to be like chameleons, able to change as their environment changes. This is a great time to be proactive. Choose to make your business more adaptable.

 

Bruce Katcher of The Discovery Consulting Group in Sharon and Michael Madera of Madera Partners in Medford are organizational psychologists who help organizations thrive. You can contact Katcher at bkatcher@discoveryconsultinggroup.com.