Monday Mornings with Madison

The Accelerating Pace of Change in Business

Most people would agree that pace of change is accelerating.  Some would even say the pace of change has hastened to an alarming rate.  News travels seemingly at the speed of light.  Social media has accelerated the pace at which news hits and spreads virally across the globe.  Software updates are being issued even before the kinks are worked out of the previous version.  The next generation of smart phones is released scarcely before we’ve had a chance to even crack the glass on the previous device.  Transportation is also getting faster with high-speed trains and supersonic jets revolutionized the time it takes to get from point A to point B.  Medical advances are also being discovered more rapidly.  Seemingly daily, innovations in medicines, devices and therapies are being introduced that combat the most devastating illnesses.  And fashion no longer adjusts according to the seasons.  New styles are popping up in magazines, programs and window displays every week.  As soon as one trend gains traction, another look emerges pushing the previous one into design history.

Indeed, the lightning-fast speed of change is redefining concepts such as old, historical, dated and passé.  There isn’t even time to get comfortable and used to something before it is outmoded and updated.   In some ways, this is a good thing.  After all, who can argue against advances in medicine?  But, for businesses, it is difficult to keep up with such a relentless pace of change.  As things change, people’s skills must be updated so that they stay current and fresh.  Technology must be updated.  Systems must be replaced.  So how can businesses and employees keep up with the ruthless onslaught of change that seems to make something obsolete even before there is time to learn and adjust to it?

The Pace of Change

Change is an inevitable part of life.  In the world of business and commerce, there have been monumental changes over the years, but no change has been more radical than the pace of change itself.  Consider the changes in the printing industry.  Contrary to what most people believe, printing first developed with the use of woodblock printing on cloth during the Han Dynasty of China about 2,200 years ago.  Then, paper printing was developed in the Chinese Imperial Court about 2,000 years ago.  But it would be another 1,000 years before wooden movable type printing would be invented in the Song Dynasty of China.  One of best examples of moveable type print books still in existence was Wang Zehn’s Book of Agriculture, printed just over 800 years ago. Then, that type of printing spread to other countries.  That led to the first use of metal moveable type printing in Korea around 700 years ago.  Then about a hundred years after that, the Western-style printing press was developed by Johannes Gutenberg in Germany.  His big innovation was in adapting printing technology for Roman type and creating a printing press that could be used by anyone.  Gutenberg can be credited for making printing a commercially-available device.  He turned an invention into a business, and an industry was born.  That said, it took another four hundred years before printed books became affordable enough for the average person to own one.

Clearly, until about 150 years ago, changes in printing came very slowly.   It took over 2,000 years for printing to go from revolutionary invention to thriving business.  However, in the last 100-200 years, printing has evolved to the point where it is now a ubiquitous global industry that is embedded in every aspect of life.  Practically everyone in the world has either owned or read a book, magazine or newspaper.  And every country in the world today uses printed paper money.  Practically all religious doctrines have a printed book.

This pace of change is true not just of the evolution of printing, but of practically all types of businesses.  What is truly noteworthy is not the incredible changes in the printing industry over the last century, but rather the way in which the pace of change itself is accelerating the evolution of all areas of commerce.

Dealing with Change in Business

That said, businesses always want to stay one step ahead of the competition.  But staying ahead is clearly a fast-moving target, particularly due to the momentum-gaining speed of changes due to technology.  For the average small or mid-sized company, it’s hard just to keep up, let alone get ahead.  Disruption is the new favorite buzz word in business.  This is true not just for technology companies.  In all industries, people are looking to overturn the traditional way of doing things and find newer, better, faster or completely original and unexpected ways of achieving goals, manufacturing products and delivering services to customers.  Crowd-funding, for example, has revolutionized the way that businesses or projects find investment capital and how people invest, and it has opened up the world of investment to even the ‘little guy’.

In the November 2012 issue of Harvard Business Review, John P. Kotter explained that “Today, any company that isn’t rethinking its direction at least every few years—as well as constantly adjusting to changing contexts—and then quickly making significant operational changes — is putting itself at risk.”  And Kotter wrote that two and a half years ago (an eternity by any current measure of change).  Since then, change is arguably occurring even faster!

While existing, old-fashioned processes for running the day-to-day functions of most companies still work just fine, regardless of the increasingly hectic marketplace surrounding them, according to Kotter what no longer works are the traditional methods for:

  1. Identifying the greatest threats to the business early enough;
  2. Spotting the choicest opportunities for the business soon enough;
  3. Formulating the most creative strategic solutions swiftly enough; and
  4. Implementing those solutions fast enough.

It is in these four areas is where rapid change is tripping up organizations.

Agents of Change

So what is the solution?  One suggestion is for a company to have a department or team whose function is to continually assesses the business, the industry, and the organization, and react with greater agility, nimbleness, and ingenuity to identify direction and design and implement new strategy.   The key would be to ensure that the existing hierarchy would listen to, respect and follow the advice of this forward-thinking, outward-looking super strategy squad.  As George Bernard Shaw put it, “Progress is impossible without change, and those who cannot change their minds cannot change.”  This group would need to be able to build consensus and communicate vision.  They would, in essence, become the company’s agents of change.

Ch… Ch…. Ch… Changes!

The danger with having a team dedicated to ‘change’ is that anyone whose job it is to innovate will always be able to find business elements to change, especially in today’s change-happy world.  But should a company change technology, processes, and strategy every time something is updated, a new idea surfaces or an industry shifts gears?  Is change — for the sake of change — a good idea?  Most would agree that the answer is no.

Thus, Agents of Change would need to weigh the benefits and detriments of any proposed change to ensure that it was vital and necessary to the company’s survival and growth.  That is indeed a murky position.  It requires a certain amount of soothsaying to see into the future and know which changes are necessary and what can remain status quo at least for a while until it becomes necessary.  That means walking a tightrope.  Organizations too slow to change would go the way of companies like Borders which closed and General Motors, which filed for bankruptcy.  Both were a day late and a dollar short.  On the other hand, businesses too quick to embrace every change could potentially break the bank in spiraling costs and overwhelm staff.   Small and mid-sized companies must find the delicate balance of staying ahead of the curve without derailing the train.

Some Things Are Changing Less

It may be of some comfort to know that not everything is changing more quickly.  The rate of change has decreased in some important areas.  In the U.S., people are changing their cars less frequently.  It used to be that people would trade in their car and buy a new one every three to four years.  No longer.  As automobiles have improved in quality and also gotten more expensive, people are keeping their cars from six to eight years, on average.

The same is true of homes.  In the U.S., the percentage of people that used to move annually was about 13%.  That has declined about 2% in recent years as fewer people are moving.  That is due, in part, to advances in technology which make it easier for people to work from home, lingering reticence to moving after the Great Recession, and an increasing tendency for people to stay near their ‘networks of contacts’.

Of course, there are areas where businesses might perhaps prefer for the pace of change to accelerate.  After all, both automotives and homes are major sectors of the economy, and help keep the U.S. economic engine purring.  So maybe change isn’t such a bad thing after all?

Quote of the Week

“Change is the law of life. And those who look only to the past or present are certain to miss the future.” Past U.S. President John F. Kennedy

 

© 2015, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.

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