What is the importance of business adaptation? How can you guide employees through transitions and changes within the company?
Businesses must go through transitions every once in a while to keep up with trends and the ever-changing market. In Winning, Jack Welch guides you through the process of adapting your business and keeping your employees informed in the process.
Find out how to navigate business adaptation below.
How Businesses Should Adapt
Successful companies must also know how to adapt to changing market conditions. Yet enacting change within a company can sometimes feel like an uphill battle—employees are often resistant to change, and it can be costly and time-consuming. Welch gives three pieces of advice on how to navigate business adaptation.
Adapt purposefully: Because change is a necessary part of business, a common mistake companies make is to enact change without a clear direction in mind, jumping on the latest trend or trying to adapt in several ways at once. This can lead to a disorganized work environment in which time and money are wasted and employees don’t buy into the new way of doing things.
But if you instead adapt thoughtfully, with a clear goal, things will go much more smoothly. To do this, Welch recommends backing your changes with as much data as possible. This will ensure that the changes are actually good for the business and will be implemented correctly.
For instance, if you’re a car company looking to adapt to the rapidly growing market for electric vehicles, you should research everything that might affect this transition—the expected market share of EVs, the expected cost of research and development, design, marketing, and manufacturing, customer sentiment regarding greener energy, quantity and quality of potential competitors, and so on. With this data, you’re more likely to make a sound business decision, and when your employees see the amount of research that’s gone into the decision, they’re more likely to be on board with the change.
(Shortform note: The authors of Blue Ocean Strategy provide advice on how to determine if a changing market trend is worth adapting to. You should adapt to a trend if it meets the following criteria: 1) The trend has a meaningful impact on your company. A change in how people consume media won’t have a big effect on a car company, but a change in the durability of engine materials will. 2) The trend must have a lasting, irreversible impact. For example, the trend toward more sustainable, environmentally friendly vehicles isn’t likely to be reversed. 3) The trend must have a clear direction. If you aren’t sure whether the vehicle market is trending toward electric vehicles or cleaner fuel alternatives, you can’t adapt your company with a clear goal in mind.)
Dismiss the obstructors: Though a purposeful and data-backed change will help sway the skeptics, there will always be employees who remain resistant. Welch says you have to get rid of the people who aren’t on board with the change. Not only will they provide little value, but they’ll also lower the morale and motivation of everyone else.
(Shortform note: In Leading Change, John Kotter writes that the people in your company most resistant to change are often managers. Because managers have extensive knowledge of the way things currently work, they usually feel they’ll be the ones to suffer the most from organizational changes. Further, their knowledge of the company and their power within it can make their resistance especially difficult to navigate. Kotter argues that the best way to deal with resistant managers is to approach them early and clearly explain why the change is necessary. Like Welch, Kotter argues that if a manager refuses to adapt, you must get rid of them.)
Search for opportunities everywhere: Sometimes, it’s obvious what changes your company needs to make—for example, buying out a struggling competitor for pennies on the dollar or transitioning to e-commerce with the rise of the internet. But Welch claims that to be a truly successful and adaptive company, you need to be constantly on the lookout for less obvious changes. This might mean staying up to date on the latest technologies or emerging industries. By staying ahead of the curve on potential changes your company can make, you ensure that you’re one step ahead of the competition and, when a new market trend develops, you’re not the last one to realize it.
(Shortform note: In Only the Paranoid Survive, Andrew Grove provides advice on how to prepare for unexpected changes in the marketplace. Grove outlines six key areas in which a drastic change might occur: Current competitors, potential competitors, government regulations, customers, suppliers, and complementary businesses. By keeping your eye on changes in these areas, you can ensure that your company can adapt promptly to any market disruptions.)