CEO’s and leaders require different skills in a time of change than they do in normal business. It goes beyond skills to include mindsets. Leaders have to change what they do and why they do it. Let’s try and understand why.
When we are in normal business – the process of creating, making and selling products in a similar way over a long period of time -the focus is on making the business work better.
Better, Faster, Cheaper
In normal business management’s job is not to discover anything new (other than normal product innovation). It is to focus on marketing and selling the product effectively, increasing market share – new stores, franchises and partnerships. It’s about managing the supply chain to drive down the cost of the product (and increase product quality).
Above all, it’s increasing volume of sales and increasing margin so that each year there is a consistent increase in profitability.
In these times you want a safe pair of hands. Someone who is good at making the right decisions that improve the effectiveness and efficiency of the company. The company needs to keep doing what it does, better, fast and cheaper…
Why Blinkers Work
Now a quick segue.
Horses are shy. They are herd animals. When they see something that scares them they bolt and stampede. That’s a great survival trait. When you are a warrior on a horse charging at the enemy it’s less useful. Having the cavalry break and scatter because of the noise and sights of battle is a bad thing.
What cavalrymen did to solve this problem was to put blinkers on horses. These are small patches of leather that go around the horses’ eyes. They block all the peripheral vision. The horse can only see forward. This made it very easy to get them to charge the enemy lines (though not run onto spears – horses aren’t that stupid).
Management Delivers Better
In normal business, we put blinkers on managements’ eyes. We want them going straight ahead, focused on doing more of what they are doing. Better, faster, cheaper.
This gives us great results. In normal times this is how businesses grow to great size. Businesses kick out the mavericks, the bolting horses, that don’t wear the blinkers and head off in a different direction. The rest charge straight ahead getting stuff done.
Fig 2 – In normal business the successful manager is laser-focused and consistently delivers
Fig 3 – In revolutionary business the blinkered manager is blindsided because the old methods no longer work and he kills the business
Fig 4 – In revolutionary business the blinkers have to come off and new opportunities spotted and then targeted with the laser focus.
Until Times Change
In times of revolution, like now, this doesn’t work.
Let’s give an example.
Livery stables in London were places where your horses could be stabled, groomed and looked after when your carriage wasn’t being used. Under normal business, the Liveryman had to make sure that the horses were well fed and groomed. He’d grow his business by the horses being healthy and strong and attractive. Customer service, and bowing and scraping, kept regular customers happy. That was normal business.
When automobiles started to appear on the streets of Pall Mall. They weren’t a threat. noisy. Unreliable. Dangerous. The liveryman offered a far better service with beautifully polished carriages. Most liverymen ket doing what they were doing and got wiped out as horses disappeared off the streets of London. Better, faster, cheaper led to a dead end. A faster horse, it turned out, wasn’t what people wanted.
Then Different Skills are Needed
The skills that the liveryman needed were
- The ability to take off the blinkers
- The ability to look around, see the world had changed and realise that they needed to do something different
- The ability to conceive of a different way of delivering
- The repurposing of their faster, better, cheaper methods, to a new business model
Put in a context like that it’s obvious that the liverymen should have adopted the automobile. Some no doubt changed their business models to become car salesrooms, service centres, tow trucks, scrap yards and more.
In the context of our own time, it’s a lot less obvious what the right thing to do is.
When do we change our business model? How do we change it?
You can read the process that I use to help bold leaders change their business model here.
