Darwin to global research demonstrate that those who cannot adapt to change do not survive. Many animals have become extinct because they could not adapt to climate change. Many large and powerful organisations have gone down: Chrysler in the US, Dalmia Group, Hindustan Motors, HMT Watches, Kingfisher Airlines, Jet Airways, Kilachand Group and Mafatlal Group, to name a few that were big and powerful at one time.
Yet, many companies like Abbott, Apple, BBC, Cannon, Disney, Gillette, Google, Infosys, Intel, Microsoft, Nikon, Southwest Airlines, TCS, Toyota, Volvo, etc., have evolved over the last five decades and are still growing from strength to strength. The question that arises is, why are some companies able to grow rapidly in an uncertain environment, while some others collapse? The situation is the same.
For example, during the Covid pandemic, while many companies have reduced manpower to survive, TCS is recruiting many employees this year. Most of the IT companies like Infosys, Tata Elxsi, TCS and Wipro; banks and financial institutions like HDFC Bank; automobiles such as Bajaj Auto, Hero Motors and Maruti have beaten street estimates and grown exponentially during the pandemic.
Can we pass it off as luck or is there a process of development and transformation? When we scan the secondary literature, certain facts emerge. In the path-breaking book Built to Last, Jim Collins proved that companies like 3M, Boeing, Disney, GE, IBM, HP and Johnson & Johnson had a compelling and powerful vision, and therefore succeeded. They knew very clearly the destination to reach and had clearly crafted milestones to achieve it.
These companies had a core ideology and a very compelling purpose and work beyond just making profits. They have very strong core belief systems. In contrast, companies that have gone down did not have an enduring purpose, an ideology or core philosophy; they were only out to make profits. He also found that visionary companies believe in creating a strong culture where people love to work. Herb Kelleher, Chairman of Southwest Airlines that has been voted as the best airline in the US for the last 40 years, had said that his employees are the first customer, the passengers are second.
If the employees are not happy, they cannot make the customers happy in a service industry. Southwest Airlines has always followed this fundamental philosophy to make the passengers happy. They also ensure flights are almost always on time, provide affordable tickets and offer great in-flight entertainment to passengers. Indigo Airlines in India is doing the same. Another area emerging as extremely important is innovation. Professor Rossabeth Moss Kanter in her book Change Masters strongly advocates the need for innovation. She says the essential difference between 20 years earlier and now is that the customer has more choices than ever before.
The customer is not interested in buying an outdated product or service that does not look or feel good or does not add status. Apple, for example, has always had a core philosophy to provide designer and highly useful products to the creative fraternity. Almost all designers and creative personnel use Apple because it suits their requirements. Irish author and philosopher Charles Handy also advocated innovation as the key to survival. However, many organisations are not designed to be creative ones. Most are highly structured, regimented, having too much hierarchy, too little scope for discussions and too much information flowing from top to bottom and not the other way round.
Professor Peter Senge, the founder of the concept of a learning organisation, says most firms have two sets of people, the thinkers and the doers. The thinkers are people at the top management who just think and create corporate strategy while the doers just execute what is thought. The top management in most cases is divorced from reality and does not really know what the customers feel about the products and services as they have no channel of communication going from the bottom to top.
In most organisations, the sales officers/executives or workmen and frontline supervisors are the ones who really know the issues the customer is facing. Senge therefore advocates creating a learning organisation to get information from the bottom to the top and building strategies and products that delight the customer based on that. According to him, what we need is a thinker-doer paradigm, wherein everyone thinks and everyone does.
Many companies have gone a step further and started using design thinking to create products and services by involving the community of customers. Another major area emerging in the management of change is data analytics. The purpose is to find out customer preference, target them with advertisements and other forms of communication, and then provide them with designer products or services. Management of change is a fascinating area and my experience has been in implementing it over 30 years.
Ashoke K Maitra (ashoke.maitra@gmail.com)
Founder & MD, Sri Ramakrishna International Institute of Management