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Every organizational culture is a collection of the stories that created it. But as cultures morph, so do their myths, standards and underpinnings. Sometimes, the change is gradual, the result of an expanding market or new partnerships and channels. Occasionally it is explosive, often the result of a game-changing new product or service. Certainly, Apple looked very different a year after the introduction of the iPhone in 2007. Netflix, Amazon, Nestle and a host of small to medium-sized organizations leveraged changing demographics, workforces and technology to reinvent all or part of their businesses and expand global brands.
When a company makes that kind of shift externally, there needs to be an equal, often greater, shift internally. Business processes, critical metrics, organizational models all need to be re-examined. If, for example, you undertake a change in branding, then you will need to reprioritize spending and possibly redesign internal processes to be consistent with the new brand promise. Declaring yourself “customer-centered,” for example, without improving customer-facing processes and examining how the service organization is measured and rewarded is an open invitation for customer (and employee) cynicism.
Often, the old stories that a company tells about itself are no longer suitable to a new brand, customer base, scale of business or even economic environment. While Apple continued to innovate under Steve Jobs’ leadership, IBM was focused on margins and driving down the cost of manufacturing. There’s nothing wrong with that, of course but was it enough? Apple might never have gotten a foothold if IBM had not all but ignored the company. IBM’s “story” was that it had created the market, that Apple was a passing fancy without the capacity to compete.
Steve Wozniak developed the Apple One in 1976. By 1984, Apple was advertising on the broadcast of the Super Bowl, with ads that specifically targeted IBM’s personal computer. By refusing to take Apple seriously, IBM allowed it to enter its market easily. Fast-forward to 2014 when IBM and Apple forged a global partnership to “transform enterprise mobility.” How the mighty have changed, if not fallen.
The Apple-IBM market battle is not the only example of a market leader giving up clear dominance on the altar of unwillingness to see a new value driver for its industry. Blockbuster dismissed companies like Netflix in favor of a bricks-and-mortar structure. Kodak was late to the game with digital photography. Toys R Us eschewed e-commerce as a passing fancy. And Xerox predated IBM in the invention of a PC but thought going digital would be too expensive.
Hindsight is always 20/20. It is easy to point the finger when looking backward, but how often do we dismiss an idea out of hand or a strategy that is different from the direction we have taken without at least trying the idea on to imagine “what if it happened that way?”
A previous client, the CEO of a $300 million health care organization, used to make time in quarterly market meetings to review emerging trends and the organizations that use them well. That process has resulted in three promising early-stage acquisitions that run directly counter to her core business. She thinks of them as a lever against complacency. Not a bad idea for any company in 2024.
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