You can change just so you keep up, or change to lead. Change to keep up is a safe choice, change to lead is bold. If you want to lead you need two key ingredients:
- Follow Rockefeller’s advice – Do the common things uncommonly well
- Follow Einstein’s advice – If you want different results, start doing different things (he defined insanity as doing the same things and expecting the same results).
Top management task is to lead the company to achieve two key objectives:
- Ever grow the company’s valuation
- Ever reduce the risk to the company’s existence
As long as top managers choose to continue doing what was always done, the growth of the company’s valuation is random and will not, at best, exceed the common rate of the market. And, the risk to the company’s existence remains the same.
To enable minimizing the risk it is essential to do the common things uncommonly well. It is essential to bring, key performance measures to significantly exceed the common performance measures in the market. The grater the gap the safer you are (see Apple for example turning inventories more than 50 times a year creating a competitive gap that is almost impossible for competition to close, irrespective of the technology).
To enable valuation growth, these extreme performance measures need to be transformed to new market approaches, linking the performance to the market needs while changing the businesses model so they are better aligned. Sadly, more often than not, the business models between suppliers and their customers are misaligned (for example service companies selling “hours” clearly lead to more than misalignment, they literally lead to a conflict, as the seller want to sell more hours, the buyer wants to buy a given service in an appropriate price. The result will be that the seller will try to maximize sold hours and the buyer to minimize bought hours). There are many such examples.
For both objectives the change required cannot be a “keep up” change. It must be a “change to lead” change. It requires, facing reality boldly and have the courage to choose the path less traveled. Luckily, (or not) the major difficulty is more in choosing and much less in executing.
What you need to do is stop seeking confidence in the choices other made, and start building confidence in the choices you make! Then, you can expect to get different results, leap jump your performance and take the lead. It is possible!