Reactive Vs. Proactive Response to Change

Newsletter 65

 

The CEO’s head was spinning. So much had changed so fast that he hardly knew how to respond. Many of the old rules didn’t seem to apply anymore. What was the right move in this bewildering new environment?

Toto, we’re not in Kansas anymore. In the past few years things have changed in a big way. For example:

  • Unemployment is still high—a buyers’ market for talent
  • Interest rates are low, but banks are slow to lend
  • Some industries are growing while others are not
  • Some companies within industries are growing while others are not
  • Some organizations are sitting on a lot of cash
  • Many people are fearful about what the future holds for them economically
  • People are still spending, but are more vigilant about getting real value

Some of this is pretty scary stuff. How can a leader best respond? There are two basic responses to change, the reactive response and the proactive response. The reactive response looks something like this:

  • Become more fearful and rigid and “baton down the hatches”
  • Focus on “not losing” rather than “winning”
  • Employ cost-cutting strategies to reduce overhead only
  • Wait for the storm to pass and the return to the “good old days”

Good luck if you choose this response—you’re going to need it.

The proactive response looks something like this:

  • Channel fear into action rather than inaction
  • Become more flexible and adaptive
  • Scan the environment to understand what drives the “new normal”
  • Employ both cost-cutting and growth strategies
  • Increase revenue and create competitive advantage

Consider these inspirational quotes regarding dealing with change:

  • “The policy of being too cautious is the greatest risk of all.” –Jawaharlal Nehru
  • “Be fearful when others are greedy and greedy when others are fearful.”—Warren Buffett
  • “Don’t waste this crisis.”—Muhtar Kent
  • “Darwin didn’t prove that survival is of the fittest. He really proved that survival is of the most adaptable.”—Jack Linkletter

A leader has two main responsibilities:

  1. Running today’s business, and
  2. Building tomorrow’s business

You’ve been doing this all along, right? You’ve got a great ongoing strategic planning, implementation, and monitoring system in place, so all you really had to do was shift your priorities and resources to place a greater emphasis on building tomorrow’s business. Continuous innovation is second nature for you. Piece of cake…

TECHNIQUES

Technique #1: Change is not only constant but constantly accelerating; choose to respond to it proactively.

Technique #2: Channel fear into constructive action and competitive advantage. Is there really a reasonable alternative?

Technique #3: Focus your leadership efforts on both running today’s business as well as building tomorrow’s business.

Technique #4: Insure that you have a strong and ongoing strategic planning, implementation, and monitoring system in place so that continuous innovation is an integrated part of your organizational culture.

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