Complacency or anticipation?

I've been living in San Francisco for three weeks now. People have asked if I was concerned about earthquakes, and to be perfectly honest, I hadn't given it a thought. But April 18th was the 100-year anniversary of the Great Quake of 1906, and I've been reading and watching about how another Big One is predicted to hit within the next 25 years. Experts say that the greatest threat to Bay Area residents is not the actual quake, but complacency. We believe that it won't be that bad, or that it won't happen in our lifetimes. Yet the threat is real.

Whether it's the threat of an earthquake, deregulation or an upstart competitor, most of us succumb to complacency. I worked on the GTE account when they were going through telecom deregulation. They made no visible changes to their business before the ruling passed, despite indications that up to 80% of their customers would defect to new providers. The same thing is now happening with the cable TV industry as legislatures rethink local franchise laws that would quicken the phone companies' entry into the television market. If the comments and emails on my Comcast blog post are any indication, Comcast has been complacent about investing in their customer experience... and they'll pay the price when competition hits.

Healthcare and education should expect major quakes as well... along with any other business that is basking in  the perceived security of size, market position, government regulation or subsidies.  We all lip-synch "there's no constant but change," yet most businesses are structured with the kind of rigidity that prevents any kind of meaningful response to a shake-up in their industries.

The bad news about earthquakes is that there's no way to predict when it will hit. Yet a shake-up in business can be predicted, so there's really no excuse. Here's a quick checklist for 'business shake-up preparedness:'

• Find bedrock. Where is the unmet need that your company can uniquely fulfill?
• Monitor. Are you tracking customer perceptions of your business over time?
• Identify fault lines. Where are your vulnerable points?
• Reinforce. Are you investing in customer support, usability and/or other table-stake attributes that will strengthen customer loyalty?
• Take small tremors seriously. Is there a new company in your space that's "too small to take seriously" yet is attracting customers and buzz? What can you learn from them?
• Retrofit. Are you evaluating new technologies or processes that will help you withstand changes in your industry? What are you doing about the web 2.0 trend?  How can you instill some flexibility, openness and collaboration into your processes?

Hurricane Katrina, the tsunami, and the 100-year anniversary of the Great Quake have been categorized as wake-up calls. And yet we still go through our lives with blinders on -- myself included. How differently would we live, love and work if we were open to all the inevitabilities of life? If we lived in anticipation of change instead of in denial or complacency?

Or better yet... instead of anticipating a shake-up, why not initiate one? That's so much more exciting than the status quo. It's going to happen anyway... you might as well be the one in control.

Comments

[Joe Vasquez]

Great post - my question hits on your second point:
Monitor. Are you tracking customer perceptions of your business over time?
Can you give me a practical example of how this would be done? Yes, I am a little green when it comes to branding, but I am learning! Thanks for your blog - great stuff!

[Big Picture Guy]

I’ve always been a fan of metaphors, so the earthquake thing works well for me. I am into tremor harmonics and plate tectonics as much as the next guy. But, what I really love are acronyms and other mnemonics. Putting it all together with the hope that I can further the discussion, I propose for your consideration The Three Rs, a three-phase response to rapid and overwhelming market change.

The Rumble:

When a company or even a whole industry faces upheaval, there is, inevitably, surprise. In retrospect, that itself should be the biggest surprise for, most often, prior to earthquakes, there are warning signs. There is a rumble that would be noticed if management would keep its collective ears to the ground: a new technology gaining acceptance, impactful legislation on the books, a quality issue festering, persistent rumors, resistant markets, all omens and portents of things to come. Listening is not a well-practiced skill and is seldom systemic. It must be institutionalized. So, too, must preparedness. Repair defective processes, anchor brands and relationships to strong foundations, set up flexible operating modes, and (says FEMA) locate safe ground so that, when the big moment arrives, you only have to ‘drop, cover and hold on’.

The Response:

Okay, so stuff happens. Like an earthquake…say, six or seven something on the Richter scale. How fast does management react? How resolutely does it respond? One of the principles underlying Tai Chi is Wu Wei, which can be understood by striking at a piece of cork floating in water. The harder you hit it, the more it yields; the more it yields, the harder it bounces back. So management must ask, how resilient is our company? How much bounce does it have? How can power be instantly restored? What products can be rapidly pushed through the pipeline? Which potential customers can be quickly snared? How swiftly can alternate forms of distribution be arranged? What brands and which alliances can be effectively leveraged? Says FEMA, in the moments after an earthquake, focus your movements on the few steps that will take you to a nearby safe place.

The Rethink or Remake:

I have seen complacency in many companies (including my own, as visitors to The Small Office well know). Misplaced and perilous levels of comfort are often caused by senior managers who believe that they are doing a good job of looking around, who see their respective companies as well-positioned to withstand market challenges and meet market challengers head on. They mistake looking around for looking ahead, however. They look at space instead of time. Strengths and weaknesses are, by definition, about today. They have brought companies to where they are positioned now. Both, however, might be irrelevant in a changing competitive landscape. Threats evolve, opportunities devolve. What are the likelihoods and magnitudes of each when things will be different? Rethink, restore when appropriate, remake where necessary. And remember for future reference. Make earthquakes a part of corporate consciousness. Do not be afraid to shake things up yourselves. Oh yes…and be prepared for aftershocks. These secondary shockwaves, FEMA reminds, are usually less violent than the main quake but can be strong enough to do additional damage to weakened structures.

So there you have it. Planning and performing in a situation of seismic change.

I would like to take this opportunity to wish you good luck in San Fran, one of the really cool places in this country. It is a city that, at least at one time, could have been said to have as its mantra: shake, rattle and roll.

[Alex Schneider]

There are no shake-ups, or earthquakes. These things don´t happen any more. Didn´t you notice? We´re in free-float. Better discard your checklist in favor of 5 kilo of fleshy guts.

[David Foster]

Perhaps there's an analogy to "peacetime generals." I've read that when the US entered WWII, only a small proportion of the senior generals were found competent to lead troops in battle. Many of these men were no doubt fine at organizing and training (and probably at politicking) but could not deal with the chaos and the extreme emotional stress of combat.

Similarly, a company that has been a protected monopoly, or that has been in a very stable market, is likely to have "peacetime general" (and peacetime colonels, captains, and lieutenants) throughout the organization. If the shock is sudden, then--absent very strong leadership--the organization will not be able to change quickly enough.

[Ellen Webern]

I love your sense of creativity that helps people to jump out ahead of the pack and to create the new tides -- before getting broad sided by a tide. What role do you feel "interpersonal intelligence" has in the process you detailed here?

[Michael Wagner]

Good post! I like the "shake-up preparedness" wisdom.

Things get shaken so that we can identify what can't be shaken.

I especially like the question you ask, What are you doing about the web 2.0 trend?

Thanks for extending the conversation!!!