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Commentary from the Gypsey Mission / Aaron Savage

Turning to your questions though, I am aware of change management and to
be honest my opinion of it is not high. Upsize, downsize, right size
change management, call it what you like, what it means is making people
redundant and trying to extract every last bit of profit from a customer
base which is invariably dwindling. I’m far less interested in how much
change management is affected in Citibank than I am in identifying what
made Microsoft or Cisco into the orgnisations they became, and what went
wrong after that to leave them as the lumbering monoliths that they are
currently. Most companies that do hit upon a winning formula zoom and
hit positive feedback loops which results in massive growth, then
something happens and they reach a size where suddenly they no longer
believe that they can carry on growing in this way and so adopt the ways
of every other business in the world. The result is that growth stops
dead and instead of looking at how to create markets companies instead
start talking about winning UVPs and change management.

The answers I have found don’t liken a company to an engineered
structure like a bridge or a skyscraper, but instead to a living
organism.

The rules therefore are not concerned with structure and change but to
dna and evolution. Whether people believe it or not every company has to
change constantly because that is what the marketplace is doing. The
Coca Cola company today does not do business in the same way that the
coca cola company did at its inception, however it didn’t suddenly
change, it gradually evolved, because its dna enabled it to, and the
memes it spread were picked up in the marketplace. It quite literally
mutated its products, most failed, but some worked and became market
leaders. The problem with the coca cola company today is that it isn’t
prepared to try new things, it has stopped innovating and instead is
either rehashing the same old idea or trying to follow someone else’s
idea. Coca cola bottled water isn’t the answer in a marketplace that
has become very health conscious. Now, Coca cola healthy smoothies made
from 100% real fruit and yoghurt, now that would be something to get
excited about. In the meantime Innocent smoothies and Nudi drinks are
taking market share from sodas and juices are replacing soda dashes in
bars. Net result? Coca cola is not making its numbers but has no idea
how to make people drink more sugar water. No amount of change
management is going to alter that.

In nature, massive change only occurs when there is a significant shift
in the environment, however most species are not equipped to make this
change and die out (for some reason its always the very large species
who find this difficult). A real world example right is the polar bear
which is the largest land based carnivore on the planet. Global warming
has reduced the amount of pack ice which leads the polar bears to their
natural food source (seals). The result is that polar bears are rapidly
becoming extinct and cases are being reported of polar bears turning
cannibal on each other. Clearly this is a situation that has a very
bleak end to it and no amount of change management (selective breeding
campaigns etc)is going to alter it. My point is that when conditions
are such that change management is the only solution, it is more than
likely already too late.

Now here is another example. No more than 7 years ago now Google
decided to enter what was a crowded marketplace with a clear market
leader. They decided not to copy what everybody else was doing but
instead to create the best product they could based on what the
marketplace wanted. The overriding aim was to create the best search
results for any given search term. Once this was completed they didn’t
take the tried tested and approved route of mass media advertising,
instead they went out to a few early adopters and asked them to try it.
The early adopters decided this was a good product and so told all their
friends, who in turn told their friends. Yahoo, Lycos, and Excite
carried on selling banner ads on their site and taking out ads during
super bowl breaks. Meanwhile Google was stealing market share a user at
a time, and becoming the face of the Internet that people trusted. The
scary thing about this is that according to the accepted laws of
business it shouldn’t have been possible for this to happen. Yahoo had
the market share, had the brand recognition and was spending the bucks
on top/down advertising. Google however had a viral message in its
memes and a dna which enabled it to mutate and adapt, first into pay per
click advertising and then into Google earth, Google mail, Google trends
and the wealth of other Google products available. Interestingly
enough, many of Google’s mutated offerings failed, but the point was
they were not afraid of this, in fact they thought it was a good thing
to fail because they learned more from a failure than they did from a
success.

Google is now one of the largest most profitable companies on the face
of the planet. Where is Yahoo? Google also have not stopped growing
because their dna does not recognise the size limitation that other
companies do. Google has not changed its business model, it still
spreads memes through its products and still mutates its offering. Some
of them fail, most of them now work, and Google just keeps growing. Try
offering change management to Google and see what their reaction is.

You are right that change is scary to a lot of people, but that’s
because people like their routines, it is safe and familiar. Change
challenges their very existence. Massive change is also unlikely to
produce the desired results long term. If however you accept that
change is a gradual and continual process it becomes significantly less
scary and if you then accept that change is actually essential to a
company’s long term survival then it becomes a fun thing to do. The
problem with business today is not lack of information or the time to
get it. The problem is the time it takes to make decisions and then
implement them. Companies like Google understand this and make
decisions quickly because they are not bothered about failure, they
recognise that the worst thing they could do is nothing, and the second
worst thing they could do is nothing slowly.

To succeed today is not about having the biggest advertising budget.
Viral marketing and social media have proved this conclusively. The key
today is to spot a gap in the marketplace where you can have access to
early adopters. Don’t open up another pizza restaurant and try and get
a higher satisfaction rating (I guarantee that the one with the highest
satisfaction rating was the first one to open every time). Instead look
at what people who like to eat pizza out also like to do. Maybe give
them a library, or offer wine tasting. The point is do something else,
something nobody else is doing.

When you go for a drive in the countryside you might notice the first
cow in a field, but after an hour and the fiftieth cow you no longer see
them, and by the end you wont remember them. What about if you saw a
purple cow though? Would you remember that? Of course you would. A
purple cow is different, you’ve never seen it before, and you remember
it, tell your friends about it and build its reputation. Starbucks for
instance didn’t try and create a new coffee for supermarkets or copy
every coffee shop model in Manhattan. Instead they created a coffee
tasting experience with a lounge and newspapers. They continued to
adapt by providing wifi access. Then of course they grew so big that
they stopped believing in themselves and their growth curve flat lined.
You follow?

Personally I don’t believe that globalisation is necessarily a hindrance
to new companies, the hindrance is lack of ideas. Successful people are
passionate about their products, to the point of being obsessive.
Obsession is a good thing in business because it gives you a single
minded edge, and the marketplace today can smell sincerity just as much
as it can smell insincerity.