Learning to adapt in the face of change
The secret sauce to not only survive, but thrive, in an unpredictable and fast moving world
The only certainty in business is change
Every business is constantly in a state of change. This has been true for businesses across the world for decades, even hundreds of years. What has changed, however, is the speed of change. What used to take decades can now happen at the blink of an eye.
The speed of change really started to take off with the exponential growth in modern technology. The development of the mobile internet over the past 20 years, for example, has driven fundamental and irreversible changes in how businesses operate.
Now, with a global pandemic changing the face of the global economy in just a matter of weeks, businesses have a new kind of force to reckon with: one that has literally forced businesses to change in a couple of weeks rather than years. While the effects of this pandemic are still ongoing, businesses able to change quickly have a high chance of survival; those that don’t are likely to be wiped out.
As a whole, this new mix of technological and environmental forces of change provide an interesting managerial challenge. How do you successfully drive change within your company not only to survive, but to thrive, in an unpredictable and fast moving world?
It’s about adaptability
Adaptability goes a long way in driving and handling change. Businesses and business leaders who embrace adaptability as a core value are often intrinsically open to new ideas, naturally question the status quo, and have the willingness to go against conventional thinking.
By being adaptable, you encourage your team to ask the right questions and embrace the willingness to implement solutions that will help evolve your business in the right direction. But what really matters, and especially in the face of faster change, is that adaptability does not only help your business react quickly; it gives you the foresight to anticipate change
Learning + Agility = Adaptability
If adaptability is the secret sauce to surviving and thriving in the face of change, the questions then are: what makes an organization adaptable? And, how can you design an adaptable organization?
Adaptability means: learning faster what works and what doesn’t.
Companies that embrace adaptability have the courage to change, the courage to experiment and the courage to fail once in a while.
The market dominance of Amazon, for example, is a function of it’s adaptability. Jeff Bezos first launched Amazon Auctions, then the “zShop” – both of which were precursors of the Amazing Marketplace. Both concepts were huge flops. The whole industry launched at Bezos. But in the spirit of adaptability, he learned from his experiments, evaluated the data, and adapted accordingly.
What is different today than in the case of Amazon and Jeff Besoz is that while Amazon was a product of trial and error over a number of years, the current global situation does not allow us the luxury of years. And because an organization can only adapt at the rate at which it learns, we are now all required to learn at a faster rate than ever before.
Please do not misunderstand: Of course, you cannot learn in the face of change if, like a tourism company, you are forced to close overnight. But for those companies still on their feet, the question is: how do we learn during and after the crisis? And how do we do this fast?
In the long term we are not all dead
As was pointed out in a blog post by Bain in May 2019, companies who were able to adapt before and during the 2008-2010 crisis emerged as “winners”, while those who failed to react became clear “losers”. Whereas the winners invested consciously in data-driven growth opportunities before and after the crisis, the losers were stagnant throughout.
The impact and divide is particularly noticeable in the long term. Forrester Research also measured the long term impacts of adaptability. In a study from 2015, Forrester proved the DNA of successful and growing companies is a combination of three factors:
- A culture of experimentation
- Customer focus
- Data-driven decisions
In December 2019, Forrester repeated the research and got the same results. The conclusion is: companies that apply a combination of the above three factors are significantly more successful in the long term than those that do not.
Experimentation, customer focus, and data-driven decisions
Digitalisation has accelerated the speed at which we can examine, understand and learn from customer data and behaviour.
By embracing a culture of experimentation, businesses can learn by doing, introduce new ideas and clarify strategies that will help steer their business in the right direction. To ensure such culture is at the core of the business, instead of being just an afterthought, your business must ensure that:
- Management understands experimentation on a strategic level
- Experiments follow the right goals
- Real outcomes are measured
- Experiments take place at the level of principles
At Heroleads Asia, we have developed our own method of deploying experiments to ensure we are addressing the right fundamentals. For example, we run experiments that seek to answer tactical questions, such as “does this button text work better?”. We also run experiments to investigate growth-relevant principles, such as “does the principle of displaying discounts help achieve higher average order values?”.
Our method of experimentation is modeled on the Agile Growth Process, which differentiates between different levels of experimentation and is analogous to the McKinsey 3 Horizons model
The Agile Growth Process model assumes the following laws:
- All experiments follow the same principles, which are to Analyze, Prioritize, Validate
- To analyze is to find qualified growth hypotheses by understanding customer reality
- To prioritize is to consciously focus on the most promising hypotheses
- To validate is to trade fair on the basis of real business objectives what works and what doesn’t
- If a hypothesis can be linked to a business goal, this should be the basis for turning the insight into real growth
This may sound simple, and it can be, but to embrace the model will take more than just an ideation workshop. Designing valuable growth hypotheses are the result of systematic and continuous research into the customer experience. It requires you as an organization to have a deep and real understanding of your customer at all touch points.
7 questions you should ask to understand your organization’s adaptability level
- Do we investigate customer reality at all?
- How has customer reality changed in the current situation?
- Which, if any, part of the change will be sustainable beyond the crisis?
- How can we transform this change into business opportunities?
- Do we measure the right goals?
- Can we prioritize correctly in the current time?
- How will this affect our business in the long term?
Conclusion
In today’s world, the ability to experiment, learn, adapt, and therefore to react to change is not a “nice to have”; it is essential for business survival. It is through experimentation that organizations operationalize their adaptability, and allow them to connect business goals with customer behaviour while ensuring measurable outcomes. Those who fail to do so will likely fall behind.
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