Staying at the Top

An organization has done things right (in retrospect all successful organizations seem to have got things right) and succeeded beyond expectations. It is now widely recognized as a success story. What next?

The road to the top is exciting, but staying at the top seems a bit trickier. You don’t necessarily have someone to benchmarking against. An oft used strategy when an organization reaches the top is to ‘Defend its territory!’.

But does only territorial defense lead to success in the long run? What were the behaviors which enabled success in the first place? It was about exploration and gaining territory. Given that there were larger players around, survival required exploration and hence the company focused on it. But when you are the largest player around, not exploring doesn’t visibly threaten your existence in the near future. If you happen to be in an industry not characterized by sudden technological breakthroughs or obsolescence and customer preference changes the temptation to maintain status quo becomes higher.

How does a market leader attempt to maintain status quo?

It might try to ‘standardize’ everything which it thinks led to its success. The focus shifts to ‘reliability’ – everything must be predictable. How do you ensure reliability? Implement stringent systems/procedures. Page loads of process manuals are created and an army of audit processes are instituted.

What happens to the focus of management in such a scenario? Think of a situation where not much happening is in the external environment and consequently not many organizational changes are required within. In such situations, the focus of management exclusively shifts to figuring out errors/deviations and correcting them.

Hence you have a system where in search of reliability and predictability, systems replace people instead of supporting people in their work. Status quo is maintained and with not much harm because the winds of change are not there.

Let us delve deeper into what happens to peoples’ behavior in such cases. The system runs definite risks:

• Of ‘filtering in’ only particular kind of employee profiles during selection. One manifestation of this might be that the system would filter in people whose natural competence/preference lies in ‘defending’.
• Of ‘filtering out’ quickly anyone who doesn’t fit the bill. ‘He didn’t fit our culture’ is what is said in such cases.
• Of behaviors undergoing standardization. You might subsequently create clones who over a period of time get institutionalized and soon start glorifying their institutionalization. ‘If you are not like us, you are worth nothing’; ‘We are the best’! are oft heard statements in such cases.

There is a difference between a successful company and a company that exhibits success enabling behaviors.

Are the behaviors listed above representative of a company that exhibits success enabling behavior? At the least, the company (the market leader) would undergo a tumultuous phase when the winds of change arrive and its survival depends on doing something more than just defending/maintaining status quo!

What are the success enabling behaviors that a company can exhibit – behaviors that increase the odds of a company succeeding even under adverse external conditions?. That’s something I would delve into in a subsequent post.

-

Sourav