Remember "The Matrix"? Early in his re-education, Neo finds himself faced with a test of will. He has been shown an entirely new reality. He knows that the old rules do not apply. Then, he is asked to do something that seems really risky, at least by the old rules. He is put in a position to jump 50 yards between building tops, 30 stories up. His conscious mind knows it is possible based on the new rules. He has even seen it done. Yet he is unable to convince himself after a lifetime of experience to the contrary. Luckily for Neo, he is insulated from the damage of the fall. Not many of us are so lucky.

Sometimes, the rules change. How quickly and thoroughly we adjust makes the difference between mediocre and outstanding performance — and sometimes between survival and disaster.

So, how does a leader pass the jump test? The first step is to be aware that the rules are changing. In a climate that has kept business primarily focused on expense reduction for the past few years, it is easy to be caught short in dealing with changes in the market. Savvy leaders ensure that there is some process in place to keep them informed of changes that may impact their business. Whether your answer is a strategic marketing department or a personal Web-based news feed, having something in place is critical.

Next is to validate and fully understand changes on the horizon. Neo understood rationally that the old rules no longer applied to his situation. But he could not fully shift his view of reality. If we get information that is outside our current understanding, one of the biggest challenges is to fully embrace that new information. Once a leader has done the investigation to validate that the landscape is changing, the challenge becomes to get ourselves and our organization to fully engage with what we have learned and act with confidence.

For a business with new competitors, new regulatory requirements, changing demand or shifting price pressures, time is critical. First movers do not always get the new strategy right, but they do get the most time to adjust. The sooner leadership can fully understand and embrace the new reality, the more fully they can capitalize on the change.

Want proof? Ask anyone competing with offshore outsourcing if they still do business today the way they did a few years ago. As the technology that enables real-time process outsourcing has become viable and accessible, everything has changed about those businesses: value proposition, pricing, customer acquisition, expense management — you name it and it is different. Development shops, tech support desks, call centers and other process companies have had to adjust to the new realities to remain in business. Those that saw the trend early and responded had the best opportunity to adjust their own strategies to weather the change. Companies that did not see the fundamental change in landscape that was caused by the viability of outsourcing are mostly out of business.

I would love to tell you that there are simple steps for handling this level of change, but there are not. So, think of these as three giant steps. First, put in place a way of scanning the market for changes, and pay attention. Second, respond early when you think that a change is on your horizon. Do the homework to be certain. Third, when you are certain, do not delay in responding to the new rules. Get committed, make your changes and monitor closely for needed adjustments. Otherwise, it is a long way down.

(I. Barry Goldberg is managing director of Entelechy Partners, an executive coaching and leadership development firm headquartered in Little Rock. Barry holds an Advanced Certificate in Leadership Coaching from Georgetown University. E-mail him at barry.goldberg@entelechypartners.com.)