Insufficient reactions to shifting external forces
Many organizations Stuck in Another World for an extended period of time don’t survive.
There are three major factors that cause organizations to become Stuck in Another World.
One: They don’t recognize or react to the changing industry forces and emerging trends
Two: They have lost their uniqueness and competitive advantages
Three: Products/services have become uncompetitive commodities
One: The Industry Has Radically Changed
Industries change constantly. In some cases, the change is radical and quick; in others the shifting dynamics are more subtle. In either case, it’s important for companies to know the overall industry structure and trends and to exactly understand their current fit. Leadership needs to critically examine whether their industry warrants continued investment.
Some typical industry factors that may freeze a company:
- customers demand technological changes that require substantial investments in physical plant or processes
- industry overcapacity
- the customer base is consolidating, shrinking, or going offshore
- product substitution
- the ever present China Factor
Two: No Longer Exceptional
How do you know if the special uniqueness is gone? Look to see if:
- the company once had core strengths that have evaporated.
- the company once had core strengths and they are now gone, but management falsely thinks they are still present (perception versus reality).
- the company has real strengths but management takes them for granted and is not exploiting them (this is the easiest to fix). How can these be used to fuel future growth?
- the company never had any real competitive advantages or true “…pockets of strength”. This may not be good for the company, but it is not what is causing the business to be stuck (they don’t know what they are missing).
Three: Where is the Innovation?
Products or services that were once superior and dominant in the market can quickly become ‘also-rans’. Merriam-Webster defines an ‘also-ran’ as:
- a horse or dog that finishes out of the money in a race, or
- one that is of little importance, especially competitively