The larger you are the faster you must adapt
There is an inverse relationship between size and the need to change.
Large organizations are typically slow to change. They have built up systems and ways of working that reinforce conformity. They de-risk and take careful action. They adjust slowly, so that they don’t make a mistake. A change process can take a couple of years in a typical organization.
And this eventually leads to their demise. This is why the tenure of companies on the S&P 500 has dropped by over forty years in the last few decades.
Large companies used to stay large for a long time.
Now, they evaporate.
Here is the challenge – computing power doubles every 18 months. What used to cost a fortune yesterday costs nothing tomorrow.
Think of DNA sequencing. Just a few years ago that cost 10s of thousands of dollars and months of time. Now you can buy a DNA sequencing kit online for $70.
So, the company built up around the old model would have had to move quickly to adapt. The expectation that they have a couple of years to make the change is false.
If it takes a company 2 years to adapt, the model to which they are adapting is already out of date by the time they get there.
For small organizations, making these changes is relatively easy. They can shift fluidly. They don’t have as many people and they don’t have as many structures in place.
As a result of this fluidity they can actually spend more time on the change process itself.
But when you have thousands of people and the deep-rooted structures, being large implies you have to be good at changing those quickly. There can’t be a lot of hemming and hawing and discussion.
If you have to spend an hour with each individual that can add up when you have 10s of thousands of individuals involved.
So, large organizations must take bold, decisive steps towards change and implement these quickly. They must become good at managing this change process and engaging people – change itself must become a core competency.
At APA we use a process we call high velocity change. We define the change that needs to happen, and we push this quickly through the organization.
All change implies some form of discomfort because it means going from certainty to ambiguity, to definitely knowing what is going on to figuring things out. But the faster we get through that discomfort, the sooner we see the results and the more adaptive the organization can be to the market.
It is like a band-aid – rip it off quickly then get on with your life. If you dwell too long on the change, the world will pass you by.