If you want a reason to innovate, try survival.
The assertion that “change creates incompetence” (Seth Godin) may be validated by some numbers from a variety of sources that seem to agree on one point: we can’t predict the success of a company beyond its middle age.
In 2014 some figures were published reporting the life expectancy of companies listed on the S&P 500 to be 18 years. Otherwise put, 75% of the companies listed on the index at that time would be replaced by new businesses we haven’t even heard of within 10 years.
These figures were generated before the current rate of change really got going. Figures are hard to find now but let’s take a wild guess (call it a forecast if you like) and suggest that this outlook might be overly positive for some companies.
We like this list from World Economic Forum
- The right strategic vision is critical – in addition to anticipating what your customers are going to want, you need to define the depth and scope of the changes and redesign your internal processes and broader ecosystem.
- Execution is the hardest part of transformation – more than half of all companies undertaking transformation will fail to achieve their desired outcomes. One of the most common stumbling blocks is underestimating the operating model refinements that will be required across the organisation.
- Beware leaders who are clinging to past or current successes – this is the hypnotic siren song of the status quo. Transformation needs to be a continuous, never-ending process rather than a distinct ‘event’.
So, accepting that the markets we operate within are changing beneath our feet and that companies must change to survive, does this really affect you?
If you can imagine a Nasdaq 500 company not being able to react to disruption inside a year, there’s a great future for innovation and creative competition. Thank you, Michael Schrage: “Great companies make change for a living.”
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Intelligent application of artificial intelligence. Innovation justified.