Sounds crazy, but some of the most significant – frankly, existential – problems companies face are the ones they struggle to see, never mind analyse and deal with.
There are three reasons why this is the case:
The problem is mis-categorised. So a continuing failure to make sales targets, for example, might be considered a failure of the sales process, or pricing, or channels, rather than understanding that a secular shift in demand is taking place (think ‘selling meat’ to a generation that regards vegetarianism most highly; this is the classic ‘can’t see the wood for the trees’ problem).
Second reason is that the scale of the problem is simply overwhelming, and so is ignored or rationalised away. I believe this problem is at its most acute amongst organisations that have enjoyed massive success historically, and so find it hard to believe that the rules of their game have shifted against them. Think cell phone manufacturers when the smartphone first appeared (the prevalent mindset being: we are the most successful mobile phone manufacturer in history – Harvard Business Review writes case studies on the secrets of our success – how can a computer manufacturer possibly threaten us).
Or, finally, the firms are simply, completely, in the dark. Trapped in an introspective reporting system that doesn’t scan the horizon enough – if at all – everything appears to be going swimmingly, until the challenges coming down the track, that they are blissfully unaware of, run them over. This applies, I think, to most businesses.
These are all too human responses, so in a sense they are not surprising.
So how do companies see a problem that is actually right in front of them? And how should they respond?
In a nutshell, it’s mostly a matter of facing the facts squarely in the face; parking the assumptions (mostly connected with your firm’s PR perception of itself) that cause you to filter out inconvenient results; being brutally honest about what the facts are actually telling you. And then being prepared to evolve (or, if necessary, substantially change) your offer, to cope with the existential challenge ahead.
Of course, to do this you first need to amass facts, which means not just the usual marketplace research you undertake (because this, too, will be driven in part by your firm’s solipsistic view of its world), but looking at wider, global trends; looking at what startups are doing; researching not just your customer base, but those who would never dream of buying your products. You need to analyse the findings, and there are many proven models to help with this.
And then making the cold, rational changes the facts lead you to (of course, you also have to overcome a ton of internal inertia and active resistance, but that’s another story).
It can be done. Imagine your firm is the designer and builder of some of the world’s most capable and desirable sports cars. You need to scale up massively, in order to generate the cash needed to research and implement the engineering solutions to deal with the ever-increasing environmental legislation ahead. But your sales have hit a ceiling.
Research might tell you that half the world’s population (females) would never consider your products, because they don’t like the low driving position, harsh ride and noise they generate. Research may tell you that two of the world’s biggest, fastest growing economies – China and India – have no heritage of sports cars (they literally don’t know what you are talking about), and prefer vehicles that showcase the owner, rather than give the owner a thrilling drive. These are massively consequential, seemingly insurmountable findings.
So, do you ignore these facts (or rationalise them away), or do you change the mission of your business from being a designer and builder of sports cars, to become a designer and builder of cars with sporting capabilities. And using this new mission, enable yourself to produce a range of SUV’s and limousines that broaden your range, to appeal to all audiences, in more countries? The choice is yours – success or extinction.
Of course, there’s much more to it than I have sketched out here, but these are the fundamentals of what has to be done. And its not simply self-serving to observe that it is easier to do this by hiring – ahem – those with an external, independent perspective.
As always time is short and there’s much to do, so good luck and get cracking.