Not so long ago, in a client strategy session, the management team expressed great concern about the lack of diversity in revenue sources. The CEO asked the management team why they were so worried. Their organization offers a highly specialized service and, in the past, faced little to no competition. In spite of market bumps during the past 25+ years, their revenue has remained consistent or with modest growth. "We have nothing to worry about," said the CEO.
The management team did not agree. Neither did I. For the first time in its history, the organization faces newly-formed competitors and real threats to funding sources.
If we take away one lesson from recent history, it should be that none of us have 100% certainty regarding the outcomes of the new economy. Futurists like William Knoke can reveal growth and development patterns -- even predict behavioral and cultural shifts thanks to disruptive forces in our economy (see Knoke's eye-opening book, Bold New World: The Essential Road Map to the Twenty-First Century). But our world is changing at a rapid pace and many of the old models for every industry are either irrelevant or unraveling. The sub-prime mortgage industry collapsed in part because even the most informed financial institutions believed that American homeowner mortgage defaults would top, at most, approximately 6%. The number of subprime mortgages in default stood at 25% by end of 2008 (roughly 14% of all mortgages). With another wave of adjustable rate mortgages about to adjust to higher rates, losses will continue to rise (a few industry fast facts).
Old models, paradigms, and data are not as reliable as they used to be. So what is a growing organization to do? Where can you turn to develop long-term strategies for growth?
Growth-focused organizations never say never. They always expect the best but plan for the worst. Growth-focused organizations need leaders who can put ego and routine aside and expand their visions beyond industry norms and established best practices. Their employees must be ready to learn new things to keep pace with changes in how the company lives up to its vision and fulfills its mission. And the strategic plan doesn't rivet the organization to specific actions during the next five to ten years: it establishes foundations and guidelines that allow for flexible, rapid launches of new innovations, revised systems, and more effective processes.
Never say never. Always be ready with rapid response for oil rig explosions, exceptional loan default rates, changes in immigration policies, or shifts in consumer attitudes about genetically modified foods. As business leaders, your experience is valuable, but serves better as a launching pad rather than a definitive approach and strict path for the organizational roadmap. If you never say never, you can be prepared to take on anything that might shake up the way you do business.
For your consideration
Does your strategic plan allow you to never say never? Or does it contain maxims that could box you in if the economic realities break out of historical patterns? If you're unsure, call me to schedule an assessment: 206-782-4040
Considering ‘The Great Gatsby’
9 hours ago