GUEST POST from Geoffrey A. Moore
Think back a couple of years and imagine …
You are Jim Farley at Ford, with Tesla banging at the door. You are Bob Iger at Disney with Netflix pounding on the gates. You are Pat Gelsinger at Intel with Nvidia invading your turf. You are virtually every CEO in retail with Amazon Prime wreaking havoc on your customer base. So, what are you supposed to do now?
The answer I give in Zone to Win is that you have to activate the Transformation Zone. This is true, but it is a bit like saying, you have to climb a mountain. It begs the question, How?
There are five key questions executives facing potential disruption must ask:
1. When?
If you go too soon, your investors will lose patience with you and desert the ship. If you go too late, your customers will realize you’re never really going to get there, so they too, reluctantly, will depart. Basically, everybody gets that a transformation takes more than one year, and no one will give you three, so by default, when the window of opportunity to catch the next wave looks like it will close within the next two years, that’s when you want to pull the ripcord.
2. What does transformation really mean?
It means you are going to break your established financial performance covenants with your investors and drastically reduce your normal investment in your established product lines in order to throw your full weight behind launching yourself into the emerging fray. The biggest mistake executives can make at this point is to play down the severity of these actions. Believe me, they are going to show, if not this quarter, then soon, and when they do, if you have not prepared the way, your entire ecosystem of investors, partners, customers, and employees are going to feel betrayed.
3. What can you say to mitigate the consequences?
Simply put, tell the truth. The category is being disrupted. If we are to serve our customers, we need to transition our business to the new technology. This is our number one priority, we have clear milestones to measure our progress, and we plan to share this information in our earnings calls. In the meantime, we continue to support our core business and to work with our customers and partners to address their current needs as well as their future roadmaps.
4. What is the immediate goal?
The immediate goal is to neutralize the threat by getting “good enough, fast enough.” It is not to leapfrog the disruptor. It is not to break any new ground. Rather, it is simply to get included in the category as a fast follower, and by so doing to secure the continuing support of the customer base and partner ecosystem. The good news here is that customers and partners do not want to switch vendors if they can avoid it. If you show you are making decent progress against your stated milestones, most will give you the benefit of the doubt. Once you have gotten your next-generation offerings to a credible state, you can assess your opportunities to differentiate long-term—but not before.
5. In what ways do we act differently?
This is laid out in detail in the chapter on the Transformation Zone in Zone to Win. The main thing is that supporting the transformation effort is the number one priority for everyone in the enterprise every day until you have reached and passed the tipping point. Anyone who is resisting or retarding the effort needs to be counseled to change or asked to leave. That said, most people will still spend most of their time doing what they were doing before. It is just that if anyone on the transformation initiative asks anyone else for help, the person asked should do everything they can to provide that help ASAP. Executive staff meetings make the transformation initiative the number one item on the agenda for the duration of the initiative, the goal being at each session to assess current progress, remove any roadblocks, and do whatever possible to further accelerate the effort.
Conclusion
The net of all of the above is transformation is a bit like major surgery. There is a known playbook, and if you follow it, there is every reason to expect a successful outcome. But woe to anyone who gets distracted along the way or who gives up in discouragement halfway through. There is no halfway house with transformations—you’re either a caterpillar or a butterfly, there’s nothing salvageable in between.
That’s what I think. What do you think?
Image Credit: Slashgear.com
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