Being a Change Facilitator in a Stagnant Company

Kodak films, cameras, and processing centers used to be the standard for photo technology, however, their reluctance to embrace new technological developments led to their downfall, and serves as an example of the importance of facilitating change in a change-reluctant environment. | Image Attrib.: wikimedia

Kodak films, cameras, and processing centers used to be the standard for photo technology, however, their reluctance to embrace new technological developments led to their downfall, and serves as an example of the importance of facilitating change in a change-reluctant environment. | Image Attrib.: wikimedia

In a recent study, it was estimated that 40% of today’s Fortune 500 companies on the S&P 500 will no longer exist in 10 years.[1. “A decade to mass extinction event in S&P 500,” Jun 2014, http://www.cnbc.com/2014/06/04/15-years-to-extinction-sp-500-companies.html] One of the reasons for this is that companies are afraid of expanding outside of their comfort zones. They refuse to innovate, and therefore become stagnant. For leaders who want to take advantage of the rapid expansion in the marketplace, this can become incredibly frustrating. If you want to be a change facilitator in a stagnant company, you need to find a way to get an often reluctant management on board. The key to all of this is creating a proactive environment by proving the change is needed, making it manageable, and showing that the public demands it.

Kodak as a Case Study

It might surprise many, but Kodak was well aware of the coming of digital technology. In 1978, Steve Sasson, a Kodak Engineer, actually created one of the first digital cameras. What was management’s response? According to Sasson, it was along the lines of “That’s cute – but don’t tell anyone about it.”

They did go to the trouble of having studies done, trying to find out how much the invention would impact their business and how long it would take until the technology significantly disrupted their industry model. Those studies came back giving Kodak ten years to prepare for the change. While that might sound like a long time, in the technology world, ten years happens in the blink of an eye.

Instead of getting ahead of the curve, and throwing a lot of research at the new emerging technology, Kodak chose to react to digital technology by trying to improve the one thing the coming digital tech was designed to replace: film. In the end, that proved disastrous for the company. Kodak refused to give up the status quo, and gave into the fear of trying something new over remaining stable.

Most companies refuse to innovate because of fear. They fear the change that is coming and anything that will disrupt the status quo. The problem with this attitude is that by refusing to take risks, they’re missing out on industry-changing opportunities. Their refusal to take risks becomes the most risky behavior a business can engage in.

Had Kodak had a leadership that was willing to facilitate change, to push management even when they were fighting against the changing, things might have turned out much differently for them. Instead, they went from being a billion dollar company to steadily losing money in the 90s and early 2000s. Their stagnation eventually led them to file for bankruptcy in 2012 and made them lose their spot on the New York Stock Exchange.  

So how can a leader be a change facilitator in a company that has grown stagnant? It’s starts by introducing change not as a possibility, but a necessity.

Prove The Change is Going to Come

One of the things that held Kodak back was that they thought they had plenty of time to keep the status quo. The study they conducted gave them ten years before the digital camera would make a serious impact on their business. Leaders at the company should have jumped on that and used it to lead the way for industry change. Instead, they sat on the knowledge, not knowing or wanting to accept how critical being proactive early instead of resistant to the coming digital wave really was.

In many cases, companies might only have an idea that a change might be coming, but might not be willing to accept those changes. When you have the data to prove your case, you need to use it. You need to take what you know of your changing industry and confront management with it. Show them that by refusing to adapt to the change, they’re taking an even bigger risk that they’ll become obsolete, just like Kodak did.

One great way to convince a stubborn management team of the larger issue is to persuade them to at least let you set up an in-house discovery panel. Make use of research and development to study this emerging technology. While outside studies are helpful, inside studies can be more so to this particular cause, because management knows and trusts their insiders. Above all, make sure those studies include a worst case scenario that makes the consequences of not embracing change clear.

If someone had presented a worst case scenario to Kodak during their own studies, it would have shown that digital cameras were going to replace film. Faced with that, executives then might have made different decisions. Even a small attempt to develop their own digital camera (which they, in fact, already had a prototype of) would have helped them.

Make it clear that the risk of doing nothing is far larger than the risk of losing money spent on developing a technology that might not take off. Reduce the fear of that risk by showing management how you can start out small.

Suggest Incremental Implementation

As mentioned, when Kodak chose to ignore digital technology, they already had an engineer on staff who had invented a digital camera. Simply taking a small percentage of their workforce and redirecting them to research and develop alternatives to film, would have given them a leg up on the competition. Instead, they pulled the digital technology they had at their disposal in a completely different direction, using it to develop more photo printing technology to improve the end result of printed photographs. They seemed unwilling to recognize that digital photography had the potential to make film and photo printing near obsolete.

Sometimes, management is uncomfortable with big changes, but that doesn’t mean you can’t make changes incrementally. While it’s unreasonable to put all of the effort into a new technology or idea that’s not yet proven, it’s not unreasonable to put together a small development team to look into it.

When approaching management with a new idea, have a plan in place. Figure out the minimum amount of resources and personnel you would need to try a new idea, and present it in a way that shows that the company will still gain the benefits, while not having to invest a lot into it. The more you develop, and the more the team proves fruitful, the more you can ask for.

The key to incremental implementation is making it clear that the change doesn’t have to happen overnight. It can happen in increments that won’t significantly disrupt the company’s existing business model.  

Another measure you can use to prove that change is needed is to create a demand for it, before it’s even rolled out.

Create a Customer Base Before it’s Needed

Social media has allowed a great opportunity for companies. That opportunity is greater access to their customer base. When faced with a new technology or idea, it’s easy to find chatter about it on the web. Change leaders can create a fan base to bring to management before they even roll out the idea.

With the Kodak example, this would have been a bit more difficult, for two reasons. One, Kodak had a top secret technology that had the potential to destroy their primary business. The last thing they wanted to do was announce it to the world. Next, the internet didn’t exist yet, giving them fewer and less direct avenues of access to their customers.

Today, it’s different. You can access widespread public opinion in an instant via social media.You can launch your own discovery campaign. See what people are talking about and what people want.

A simple example of utilizing social media effectively to this end would be when Frito-Lay rolled out the “Do Us A Flavor” marketing campaign on social media. They asked for suggestions from the public at large as to new chip flavors they might like to see. Then, people voted via hashtags on Twitter. More than 14 million people participated.[2. “Cheesy Garlic Bread Chips: Lay’s Lesson in Marketing and Brand Awareness,” May 2015, http://kwhs.wharton.upenn.edu/2015/05/lays-lesson-in-brand-awareness] The end result was a new chip flavor, which the company knew had a fan base and which cost them very little to research and resulted in little risk as far as development went.  

Access to customers allows you to gauge and even drum up excitement about a potential product or idea. After all, when Lay’s realized that millions of people wanted cheesy garlic bread chips, they decided to create them. The same went with the runners up. Make your idea a viral campaign. Confront the public with it and see how they feel about it. If the idea is more secretive, you can ask a vaguer question about it. With Kodak, they could have asked the public, “Would you buy a camera that didn’t require film, even if that camera was much more expensive?” The resounding answer Kodak would have gotten was “yes.”

You have access to a worldwide focus group. Use that access to see if an idea is feasible. Then, take that data to management. Show them what the public wants, and they’ll be far more likely to allow you to turn that idea into a reality.

Creating a Proactive Atmosphere

Most business leaders don’t have the option to be autonomous. They need to convince their leaders when changes are needed. This can be particularly difficult in a company that has grown stagnant and settled for the status quo. However, by showing your leadership why a change is necessary, how you can implement that change in manageable increments, and that the public is demanding the change, you’ll develop the proactive atmosphere you need to be a change facilitator in a stagnant company.

Part of embracing change is having the right strategic planning in place to encourage it. At Applied Vision works, we can help you become a facilitator for change through our Strategic Planning Programs. Contact us now to create the change your business needs to be a success.

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