In the early 1990s, a study was conducted by Ken Preiss, Steve Goldman, and Dr. Roger Nagel. They determined what high-performing companies were doing. This enabled them to be leaders in their industries. And it allowed them to stand head and shoulders above their competition. They found four characteristics shared by successful companies, which they termed “Agility.” The key is adaptability in a changing age. These are:
1. Mastering change and uncertainty by reacting quickly to business changes. Change is inevitable, especially in business. Not too long ago, many of us went to Blockbuster Video to rent movies that we watched in the privacy of our homes. Blockbuster’s stores were everywhere. Despite some competition from smaller chains or mom-and-pop rentals, they dominated the marketplace.
Out of nowhere, a firm named Netflix became the top rental company. Using the postal service and the internet, they offered us the ability to select and watch a movie. All, without leaving our home. We didn’t have to travel to the store only to find that the movie we wanted wasn’t available. We also didn’t have to watch the movie we rented within a day and then hurry it back to the store or face late charges. We could take our time watching our film at our convenience. Blockbuster’s business declined until they were no more.
2. Enriching customers by providing solutions and not just products. Successful companies provide a service element along with their products. Imagine if Apple only sold computers, phones and iPads. A large part of their business is derived from music, apps, Icloud, Siri, and many other services.
Their services business brought in over $10.9 billion during the most recent quarter. Apple is on track to double its services business from 2016 to 2020. Services bring in more revenue per quarter, than the Mac iPad, and the Accessories” group of products.
3. Cooperating with other businesses to enhance competitiveness. Many companies believe they are already doing this. But, they are not doing what Nagel, Preiss and Goldman described. What they saw were companies that had a virtual relationship with other entities. They are not bound only by a contract (An arm’s length relationship). They share what is confidential information with their business partners.
Nike, one of the largest sellers of athletic equipment and apparel, does not manufacture anything. They have a close network of companies that provide these items to them. These partners know when new items will be added and old items discontinued. They are a virtual part of the organization. This is adaptability in a changing age.
4. Leveraging the skills of the employees. Many companies feel that by encouraging training of employees they are meeting this principle. They are wrong. Top performing companies not only provided training. They require that their employees are trained in the latest business techniques and methodologies. By staying current, they are ahead of the business curve. And they will not go the way of Bethlehem Steel, Blockbuster Video, or Compaq.
One of the companies I have worked with established itself as a leading contract manufacturer. They dealt with a variety of companies. They either took their formulas or developed formulas for them. They worked with products such as:
- Air fresheners
- Bath and shower items
- Skin and sun care.
They could produce in large or small quantities on very short notice. They were dependable and highly regarded by their clients.
The owners felt that there was another opportunity for them. It had nothing to do with manufacturing. By also warehousing their clients’ products, taking orders and shipping the goods for them, they would then be a one-stop-shop. They would then provide a complete service at an extremely affordable price.
This was a big new venture for them as it was not in their area of expertise.
They needed to set up the physical operation. They also had to hire and develop the manpower to operate it. and, they had to establish market-friendly price points for this service. My company and I were selected to help them.
We accepted the challenge and worked with them to define the strategy for the new business. This meant establishing what was immediately needed. We then covered how they would expand over the next three to five years. They were dealing with many unknowns such as:
- How many customers they would service
- The number of products each would require
- The storage volumes needed
- How to best store them
There was a lot of crystal balling (Predicting what the numbers would be).
An initial plan was developed. A layout was created that allowed for an initial operation. It also accommodated for future growth. Equipment was defined and ordered. The picking operation was defined and product arranged and stored.
A study was completed with a company that was already in a fulfillment business. From them we determined what charges could be made to clients based on storing, picking and shipping products. The company absorbed this information and transformed it into their new business.
They were practicing adaptability in a changing age.
This is what Agility is all about. It demonstrates adaptability in a changing age by recognizing the new needs of clients and fulfilling these. It keeps companies from being one-note or dinosaurs. This company definitely covered:
- Mastering change and uncertainty by reacting quickly to business changes.
- Enriching customers by providing solutions and not just products.
They are a true success story and will continue to look for new ways to better serve their clients.
Age is not and should not be a liability for a company.
It is not a dinosaur that suddenly becomes extinct. It takes hard work and determination to deal with the maze of issues that an organization faces daily. American agricultural economist Theodore William Schultz, whose influential studies of the role of “human capital” in economic development, won him a share of the 1979 Nobel Prize for Economics, once said: “If you don’t grow you die.” This statement describes what successful businesses must do.
For a company to do this, it must continue to gather and develop talent to fulfill its ongoing mission. I worked for a large corporation whose founder died shortly after I started my employment there. A colleague took me aside that day and showed me the company’s American flag hanging at half-staff. He said to me that despite the founder’s passing, the company would go on. It left me with two impressions:
- The first; No one is indispensable.
- The second; To thrive and grow is everyone’s responsibility.
We are all caretakers of the positions we fill and the roles we play in an organization. It is our responsibility to do the best we can while we are there. We are to make things better for not only the present, but for those who will come in the future. To do anything less is selfish and self-serving. And, it often produces short-lived success, but seldom a long-term one.
It is not reasonable to expect that everyone in an organization has the same value or drive. That goes back to the three groups with varying levels of motivation and commitment. They are:
- The 20% who need no prompting in order to get things done.
- The 60% who wait to see how their efforts are or aren’t rewarded.
- The bottom 20% who won’t take any initiative no matter what incentives are given to do so.
By encouraging and rewarding the top group — those highly motivated and productive — we incentivize the middle group to also participate. That is being Agile. It is also reinforcing Continuous Improvement, something that happens every day forever. Companies that continue these practices will be successful. They will continue to grow and prosper. I have experienced it first-hand and know that it works. Those who do not remain agile and improve continuously will stagnate and ultimately fall by the wayside. Those who do are exhibiting adaptability in a changing age.