So what do the winners do differently in relation to understanding the business and market environment? To answer these questions research teams led by the author have examined the corporate experience of over 2,000 companies. The results are summarized in: ‘Transforming the Company, Manage Change, Compete and Win’ and the steps that boards can take to question and challenge prevailing assumptions are set out in ‘Shaping Things to Come’ a handbook for creating a better future*.
Some companies appear ambushed or taken by surprise by external events. They find themselves ill prepared to react to both challenges and opportunities. Other businesses are much more alert to what is happening in the business and market environment in which they operate. They track issues, anticipate events and monitor competitive activities.
So what do the winners do differently in relation to understanding the business and market environment? To answer these questions research teams led by the author have examined the corporate experience of over 2,000 companies. The results are summarized in: ‘Transforming the Company, Manage Change, Compete and Win’ and the steps that boards can take to question and challenge prevailing assumptions are set out in ‘Shaping Things to Come’ a handbook for creating a better future*.
Let’s start with unsuccessful boards or ‘losers’. They are often unaware of impending challenges and pressing requirements to change. They simply do not see them. They tend to be largely oblivious to developments in the market places in which they operate. They also do not anticipate or look ahead, and they are not alert to threats and opportunities. Hence, when they do wake up to what is at stake they may have little time in which to adapt even if they had the will and means of doing so.
Losers just hunker down. They make cosmetic references to environmental and social concerns in annual reports and accounts. They stick to what they know and feel comfortable with and plough ahead regardless, hoping any problems they encounter will blow over. If they do stop and take stock of where they are it is generally infrequently. Whatever changes are made tend to quickly become permanent features.
Opportunities can also be resisted if responding to them would require changed practices and behaviours. New requirements may be perceived as distractions until such times as they become so pressing and potentially lucrative that they can no longer be ignored or avoided. Some only act when legislators or competitive activity requires them to do so.
In contrast, the boards of successful companies or ‘winners’ have more acute and sensitive antennae. They look out for the weeds that can foul propellers. They are aware of what is happening around them and in the business and market environment. They are also entrepreneurial. They view problems as arenas of potential opportunity and take the initiative in shaping the future, challenging assumptions to create new options and choices.
Winners identify and monitor economic, political and technological trends, and assess their likely impacts upon both themselves and their customers. They then consider what if anything they should do in response. Such exercises are undertaken on a regular basis, and at least once a year. Resulting actions are subsequently reviewed and if need be challenged and amended as events unfold.
Because they read the road ahead, winners generally give themselves sufficient time to register, react and adapt. Changes are made quickly as and when they are needed. They are often implemented before they are imposed or otherwise formally required.
People in winning companies address problems rather than conceal, ignore or avoid them. Hence, they do not build up to a point at which they are either insurmountable or appear to be. Steps are taken one at a time. A series of adjustments over time – some small others more fundamental - may allow winners to cope with radically altered circumstances.
Smart companies have an issue monitoring process (IMP) and undertake formal issue monitoring and management. If not undertaken more frequently this could be an annual exercise to which all board members, key personnel and even customers, suppliers and business partners might be asked to contribute. It should also precede any annual budgeting or planning.
IMP participants are asked to identify major issues, trends and developments in the external business environment, and consider: (i) how will they impact upon firstly the company and secondly its customers and suppliers; (ii) what the company needs to do in response at local, operating unit and group levels; and (iii) how it might be able to help customers and suppliers to respond (i.e. possible business opportunities).
Experienced users of IMP find that it is difficult to track more than ten issues, and better to concentrate effort on a smaller number of the more significant issues. To aid comprehension the summary of each issue, its impacts and what needs to be done in response should, ideally, be no more than a page. Those reporting issues should be asked to think through their implications and make practical recommendations for action to confront challenges and seize opportunities.
Significant positive developments and negative issues need to be continuously managed. If left unchecked even minority interests can grow like waterway weeds and block navigation. Proactive approaches can generate considerable goodwill. For example, BP-Amoco acknowledged the risks of global warming ahead of other oil companies and announced its intention of securing specific reductions in carbon dioxide emissions over a defined period.
© Colin Coulson-Thomas, 2005
Further Information
*‘Transforming the Company, Manage Change, Compete and Win’ by Colin Coulson-Thomas and published by Kogan Page can be ordered by Tel. 01903 828800; Fax. 020 7837 6348; E-mail: orders@lbsltd.co.uk or on-line at www.ntwkfirm.com/bookshop
‘Shaping Things to Come, strategies for creating alternative enterprises’ by Colin Coulson-Thomas can be ordered from Blackhall Publishing (Tel: 00 353 1 2785090; Fax: 00 353 1 2784446; email: blackhall@eircom.net) or from www.ntwkfirm.com/bookshop
Colin Coulson-Thomas, an experienced company chairman, has advised over 90 boards on director, board and corporate development. Formerly the world’s first Professor of Corporate Transformation and Process Vision Holder of major transformation projects, he is a Professor of both Direction and Leadership and Competitiveness and can be contacted by tel: 00 44 (0) 1733 361 149; fax: 00 44 (0) 1733 361 459; email: colinct@tiscali.co.uk and via www.coulson-thomas.com.
