The economy of the early 21st century has been described as a ticking time-bomb for business leaders, and not just because of the enormous quantities of debt Western governments have racked up over the last 40 years. Washington University’s School of Business has said that in the next decade, 40 percent of Fortune 500 companies will have gone, being replaced by new and more relevant brands. Just think about that for a second. Nearly half of the world’s largest companies will have been replaced in just ten years.
This is why businesses need to focus outwards, not inwards, when it comes to business. Their businesses aren’t going to fail (usually) because of what they’re doing in their own companies. They’re going to fail because of what other people are doing in the wider economy.
Big tech companies understand this. This is why Google and Amazon are buying up promising startups related to their businesses left, right and center. They know that, if left unchecked, these energetic startups will surpass them, just as they surpassed their predecessors.
Business leaders have another problem. They might be willing to embrace, the change sweeping their industries, but their staff probably aren’t. Managers are often unwilling to change, even if it means that they’ll soon be out of a job. And workers usually see themselves as being hired to do a particular job, rather than to constantly change roles all the time. Their focus is getting a little better at doing what they’re doing day after day, not changing what they’re doing because some Silicon Valley startup made their job or their product obsolete.
So what lessons can today’s small businesses learn from Fortune 500 companies in dire straights?
Have A “Can-do” Culture
Susan Robertson and Anne Manning of Harvard University recently canvassed a bunch of top companies, asking them what they felt about change on the horizon. The vast majority of the sentiment was negative. One company, a financial services firm, said that they were probably going to go out of business if technology keeps advancing the way it is right now because of their “can’t-do” attitude. A spokesman for the organization said that people at the firm were terrified of taking risks. It just isn’t in their DNA.
Consider Radical Change In Marketing
Another company admitted to the researchers that it had not invested any new money in internet marketing since the late 2000s. The shareholders were apparently bamboozled by the whole thing. Rather than outsourcing the task to a third party company like Groove Medical, they’d sat on their hands, allowing their competitors to gain a crucial advantage. Now the company worries that it will never be able to establish itself online, the world’s preeminent marketplace.
Allow Risks
The innovation manager at a construction products company talks about how employees at his firm are punished for taking risks. He says that nobody at his company is fired for playing it safe and doing what has always been done. But they are fired, he says, if they take a risk at it loses the company money.