I have been talking to many executives in the past few months about their response to disruptive market changes. Insurers and reinsurers competing with a flood of capital from pension funds. US health insurers responding to legislative changes and the advent of public and private healthcare insurance exchanges. International hotel chains fighting online travel agents for control of the customer and so forth. Some are slow, steady market evolutions, otherwise are more sudden or opportunistic moves. All demand a response, which may be “do nothing”, adjust and adapt the market positioning of existing products, services and customer relationships, or even exit some product, consumer, industry or geographic markets.
There are two fundamental questions that need answering:
What can and should management do now?
What other big changes may lie ahead of which we are as yet unaware?
Organisations and those leading them are expected by their consumers, shareholders, employees and business partners to be decisive. Yet too often I observe top management being indecisive. The fear of making a decision, one way or other, seems to be paralyzing in the executive suite. The “safe” option is often the worst option (circling the wagons and defending the organisation’s neatly staked out territory). There are, of course, shining examples here and there (Alan Mulally at Ford). However, on the whole performance in mid to large organisations is still mediocre.
Disruptive market conditions demand leaders take decisive action. That means answers in the form of a clearly defined vision of your product, service and customer relationship in the “new” market, getting buy-in from employees, and supporting them on the “journey of change” from the status quo to the future state.