Just like in nature, an ability to adapt to an ever-changing environment is just as important in the business world. With technology developing at the pace that it is, it is essential to adapt to not only survive but thrive. However, even more important, is how fast companies need to adapt to keep up with the demands of consumers. There are always new trends taking over the world and these companies and employees have to be able to keep up.
So, can companies develop adaptability? Is it something that older, traditional companies lack? Max McKeown is a business strategist who works with big organizations and has some interesting insights that can answer these questions.
In this book summary readers will discover:
- The importance of adaptability
- Learning to adapt
- The role experimentation plays in adaptability
- Find the right pace
- Adaptable leaders lead to success
Key lesson one: The importance of adaptability
When things change around you, what do you do? Do you just keep doing what you’ve always done ignoring the change? Or do you make changes accordingly? People who adapt know that change is inevitable and in order to achieve your goals, you have to keep going no matter what. This is why they don’t spend too much time dwelling on the problem and instead focus on solutions. They know that in order to succeed they have to keep going in the face of adversity. Adaptable people also are not afraid to ask for help or admit that they need support to make necessary changes. McKeown refers to these people as High Adaptability, High Achievement people or HAHAs.
Companies as a whole, also know that adaptability is the key to long-term success. Just look at Ford. In 2008, the government of the United States offered to pay off Ford’s debt to avoid the complete downfall of the company. The company, however, declined the offer. Chairman Bill Ford knew that the cash would solve their current problems but it would not allow them to make the necessary changes to avoid them again in future. You see, Ford knew that the company’s failure to adapt to the modern market was the root of their issues. Thus, they decided to take a different route, one they very aptly named The Way Forward. They focused on matters they knew they had long avoided including taking the environment into consideration in their manufacturing processes. This resulted in big changes at the company. They downsized by 25 per cent, found a system that decreased production time and shifted to making smaller fuel-efficient cars.
As much as this approach saved Ford from becoming a company of the past, this all could have been avoided if they had adapted sooner. Toyota is a perfect example of a car company that has mastered adapting to changing market conditions. The Japanese organization is known to always look for new ways to improve and to satisfy customer preferences which change often. This attitude and practice allow Toyota to stay ahead and anticipate changes in the market.
Key lesson two: Learning to adapt
One of the most important parts of adaptability is learning from mistakes – specifically, the mistakes of others. A good example of this also comes from the automobile industry. In the 1950s, the British were focused on one thing and one thing only, producing powerful cars. They were so engrossed in their task, they completely missed a part of the market that was slowly growing – young, environmentally friendly people. This slack was picked up by the Germans who started producing microcars. The British car industry was quickly left behind but this did not stop their attitude. They would focus on their cars and the Germans could focus on their own.
However, there was one small team of auto engineers who did not agree with this way of thinking. They were the British Motor Company and they saw the potential problem with being stubborn like the rest of the industry. Thus, they focused on the production of a new car, the Mini. This resulted in the British Motor Company achieving huge success in the following decades. Therefore, learning from the mistakes of their peers and adapting to change paid off.
That being said, sometimes this sort of thinking backfires as well. PepsiCo found this out the hard way when they changed the brand image for Tropicana orange juice. This change which was supposed to promote awareness of the brand’s quality actually resulted in a 20 per cent decrease in sales. PepsiCo scrambled to rectify this and ended up reverting to the old image. This entire process cost them a total of $33 million! Therefore, as much as it is important to learn from the mistakes of others and adapt, it is also important to do a bit of research first before you jump straight in.
Key lesson three: The role experimentation plays in adaptability
Did you know that in 1940, Adolf Hitler put a stop to all research into the development of weapons if it took longer than six months? This left the Nazis with short term projects that did not allow much experimentation. In contrast, their Allied counterparts were encouraged to experiment as much as they wanted because they knew it would lead to a much-needed breakthrough. That breakthrough came from defence scientist Willian Butement who developed the proximity fuse that gave soldiers more control over the timing of bomb detonations. It took Butement 4 years to develop the proximity fuse but it played a crucial role in the Battle of Bulge. It took him longer than six months, but the results were definitely worth it.
Likewise, the most successful companies understand the importance of experimentation. Not only does experimentation lead to new ideas, but it also allows them to adapt when needed. If things don’t work out with one product, they have another waiting on the sidelines. This is something Apple is famous for. Their first handheld computer was called Newton but it received bad reviews and was prone to errors. When it failed, they went back to their experiments and ended up developing the iPod, iPhone and iPad and we all know how that turned out.
Key lesson four: Find the right pace
When it comes to adaptability, companies cannot afford to be too hasty to adapt and neither should they fail to anticipate changes in the future. It’s all about finding the right pace for the organization. If a business goes full steam ahead, it could end up crashing.
Take, for example, Netflix. Before they became the successful company they are now, they made some hasty decisions which cost them dearly. When they first launched, they understood that streaming content was the future of movies. It was a great concept but they were a little too quick for subscribers. They were happily content with the old deals that allowed them to rent DVDs and stream for the price of $9.99. Netflix decided to push their customers into making the change by splitting it into two separate services that cost $7.99 each. As you can imagine, customers were not happy with this price hike and Netflix lost a million subscribers! Netflix suffered greatly by trying to implement change too soon. They eventually recovered, however, they would have succeeded much earlier had it not been for this blunder.
In contrast, Blockbuster suffered even more because it did the opposite. Blockbuster did not rush into adapting, it failed to anticipate the changes in the market at all. It was caught completely off guard by streaming services. But what was even worse was that they failed to adapt holding on to their traditional views. All they had to do was launch their own streaming service as they were already a trusted brand but the huge company that was founded in 1985, declared bankruptcy in 2010.
Key lesson five: Adaptable leaders lead to success
When it comes to big and established companies, their success can sometimes lead to complacency. And with complacency comes losing sight of the company’s goals. This has happened to many organizations time and time again leading them into trouble. Unless they have a leader willing to adapt, they will be unable to climb out of the ditch they find themselves in.
Starbucks is a classic example. They enjoyed huge success up until 2007 when it started seeing things taking a turn for the worse. The company’s chairman Howard Schulz had an inkling of what had caused this downturn – the company had stopped taking care of their customers because all they focused on was getting more stores. Schulz was right as more and more patrons left Starbucks in search of better service and better coffee. This led to them making some big changes. Firstly, they shut down 7000 stores in the United States. That quickly shut down the focus on growth and forced focus back on their traditional values – good customer service and good coffee. Next up, Schulz introduced extra training for the baristas and new roasting and grinding processes to produce better coffee. In just 3 years after Schulz took charge, Starbucks had recovered and increased revenue to a whopping $10.7 billion!
This clearly demonstrates that a leader that understands the importance of adaptability is crucial for a companies success. Many companies on the brink of failure only make a comeback due to the adaptations enforced by a radical visionary. Thus, it’s important that you have the right person in charge.
The key takeaway from Adaptability is:
The world we live in moves pretty fast. Between technology developments and an ever-evolving market, companies have to be agile enough to adapt quickly when needed. Although it is advised that you should not rush change, companies should learn that experimentation, open-mindedness and anticipating change is crucial to their success. You can remain stagnant and think that your success will last forever. If you fail to adapt to a changing environment, just like evolution, you might find yourself on the brink of extinction.
How can I implement the lessons learned in Adaptability:
Don’t be afraid to experiment. Companies these days encourage think tanks and groups of employees working together to innovate. Not all experiments will be successful but you will gain valuable information along the way. Don’t forget to do your research as well. Sometimes, it is safer to learn from the mistakes of others instead of risking failure yourself.
