What about you? What business are you in?
When you ask someone what business they are in, they nearly always answer with a list of products and services. Try it out and see for yourself. One exception you might find are executives at banks and financial services firms, who tend to say they are in the business of security and compliance. Very few people can take themselves outside the box they live in to see their business from the customer’s point of view.
While executives normally have a wider field of vision, managers and employees at the mid- to lower level are rarely willing or able to think of themselves as something other than what they see in front of them every day. You need to train an organization to do that.
Even when an executive does become aware of what the customer is really buying from them, it is not at all intuitive for them to know which S-Curve to jump to next.
This is the third and final lesson from this blog series. In order to figure out how to expand on your own DNA and create a pathway into the future, you typically need inputs from the whole organization to tell you who you are. That’s not all. You need to engage external stakeholders who can answer what drew them to you and why they stayed.
The best way to start is to kick off a big ideation square dance, where people are constantly feeding in new, fresh ideas. You might need to cluster thousands of ideas over time but eventually you will figure it out. The technology necessary to manage that volume of ideas and make sense of them all exists right now. It’s not easy but the alternative is for your company to live in a market where you may no longer be relevant, and the company can’t live that way for long.
This is how the entire subject of your DNA ties back to episode two, where we talked about how to act like an anthropologist. The anthropologist capability is how you learn to observe and conclude what customers need at a deep level, as well as where your company excels. The next step after that is to discover where the two trajectories intersect.
Once you have a solid conception of what your business DNA consists of, you have the cornerstone for all future building. You will use that DNA over and over to build business model after business model.
Companies that keep an eye on their DNA discuss it regularly across the organization and keep updated metrics around what the company does really well. The prime example of this is IBM.
Sam Palmisano, a former CEO at IBM, warned:
“Either you innovate or you’re in commodity hell. If you do what everyone else does, you have a low-margin business. That’s not where you want to be.”
Sometimes this is expressed as the difference between the red ocean and the blue ocean, first described by INSEAD professors W. Chan Kim and Renee Mauborgne in the book Blue Ocean Strategy.
The red ocean refers market conditions where blood is in the water and sharks are everywhere – a highly competitive market. Blue ocean is where you are the only one there. Only you can do what you do and profits are high because you created the demand by innovating your way there.
It is possible to move from the red ocean where you are to the blue ocean where you want to be, but don’t underestimate how big a job it will be. It involves making your company culture more innovative while letting go of old business models before the S-Curve crashes.
Sometimes to get back to your original company DNA, you have to change the company culture that has grown up around your current market offerings. People don’t want to let go of what they know, even if what they know is a ship that is sinking. Changing the culture is possible, but your best shot at changing company culture comes when you onboard a new person.
You’ve got to act fast. Under normal conditions, you have no more than few hours after onboarding before the new employee is totally assimilated into your existing culture. If you want to change the culture, onboard new talent with the culture you want. Maybe divide the company and break it out in line with the pieces that might have a conflicting DNA profile. This can be a painful but necessary transition and often this is the only way to save the business.
Most of the time, people can’t see the DNA of a company because they are inside it. It’s like asking a fish what water tastes like. They don’t know any other way. To find out what your DNA is, it is usually necessary for an external change agent come in with a structured assessment process and the backing of leading executives. At the end of this process, the change agent can confront the different parts of the organization with evidence about their DNA profiles.
After that, there are a series of developmental stages that nearly all organizations in transition will go through. The following employee competency triangle was given its current form by Paul R. Curtiss and Phillip W. Warren in the 1970s. Our experience shows that things are often easy in the beginning, when most members of a group are eager to see what’s coming and remain full of enthusiasm.
However, once the group forms and develops its ability and aspiration, frustration are likely to start building. It is extremely important at this point to start linking group members to the purpose, and carefully enlist and coach team members to maintain their belief that change is possible by working systematically and succeeding with breakthroughs.
At first, most people are unaware of how little they know, or unconscious of their own incompetence. As they begin to recognize their incompetence, they consciously acquire a skill, then consciously use it. Ultimately, they perform the skill unconsciously and they reach the pinnacle of competence. This goes for both individuals and organizations. Leaders should acknowledge early on that it can be painful to move up the ladder of consciousness.
There is no way around this triangle. You always start again at the bottom whenever you enter the unknown. Be prepared for some degree of resistance, stress and organizational pain during each transition. Every time you move from S-Curve to another, which will happen more frequently as company lifespans shorten, this must be understood to be simply part of the process.