"That's cute--but don't tell anyone."
If Kodak's bankruptcy can be traced to a single sentence, it's that response Steven Sasson allegedly received when presenting his prototype of the first digital camera to management. Although they couldn't have known it that day in 1975, Kodak's leaders had effectively ceded the company's dominance of the photography industry.
Stories like Kodak's exist in every industry. Former grocery giant A&P had its lunch eaten by Kroger because it ignored 20th-century consumers' growing taste for upscale stores. Twice-bankrupt RadioShack didn't buy into e-commerce until years after Best Buy and Walmart sold products online.
What unites these tales isn't malice or outright recklessness; it's resistance to change, a trait fundamentally baked into human beings. We're hardwired to take actions that make us feel secure and comfortable, even when those actions might be unhealthy or irrational.
I experienced this: For more than five years, I let my company grow at a modest pace because I grew complacent. I ended up losing millions because I didn't change.
The trouble is that change is constant--particularly in business. In 1965, the average tenure of a company on the Fortune 500 list was 33 years, according to the American Enterprise Institute. That figure shrank to 20 years by 1990, and AEI expects it to drop to 14 years by 2026.
The true marker of corporate well-being isn't quarterly earnings or average employee tenure; it's the capacity for change. Consider the attributes of companies that effectively manage change:
1. A purpose-driven mission
Yelp began life in 2004 not as a third-party directory of business reviews, but as an automated system for sharing private recommendations. Although users panned the platform, they began writing unsolicited reviews of local businesses. Committed to their vision, the founders pivoted, building Yelp into an internationally known brand.
A company's purpose may be supporting local businesses or improving access to health care; it's not just making money or satisfying shareholders. It's what leaders look to when deciding whether to make an acquisition or pivot, and it's a source of strength for employees frustrated by what they might otherwise see as unnecessary stress.
2. Engaged executives
It's the first principle of leadership: Followers model their leaders' attitudes and actions. No matter how stressful the change, executives must be optimistic, patient, and understanding when communicating with employees. Even the appearance of uncertainty or apathy will be picked up on and reflected back by their teams.
Emily Crawford is a senior consultant at Credera, a management consulting firm that's worked with brands from Southwest Airlines to National Geographic. She argues executive confidence is an underappreciated ingredient in the recipe for corporate change. "It means securing the needed time and money, but it also means actively displaying their own support of the change and their belief in the future state," Crawford explains.
She suggests leaders share progress metrics, such as declining usage of the old system, whenever possible. I completely agree that leaders must be radically transparent about project progress, even when it is not good news.
3. An early-adopter culture
Corporate change must be bottom-up as well as top-down. According to the Rogers Adoption Curve, people adopt an innovation following a bell curve. In the average 100-person workplace, two or three employees are true innovators and about 13 are early adopters. The other 85 will wait to see whether their peers are successful with the new technology or process before trying it themselves.
Every organization has its adventurous and not-so-adventurous members. The key question is whether the company has aimed its hiring efforts at the former. If it has--if, say, 50 of those 100 people are eager to try new things--the remaining 50 individuals will be much more willing to hop on board. Peer pressure is a powerful thing.
4. Personalized training processes
Late adopters, in particular, will accept change only when they feel equipped to succeed. Training can take many forms depending on the change in question, but one-size-fits-all sessions encourage attendees to tune out information they perceive as irrelevant. Any sizable organization must offer role-specific trainings that accommodate multiple learning styles to get the message across.
That sounds challenging, but it's something most high-functioning companies already do. They organize employees into functional departments, where leaders help new members learn the group's processes and culture. Those leaders provide multiple avenues for continuing education, such as articles, slideshows, and conferences.
A failure to change can more simply be explained as a failure to grow. Companies that manage change well--uncomfortable though it may be--will not only outlast the competition but also assure themselves a long-lasting role within their industries.