Overcoming the Enemies of Agility

By Josh Epperson

Tuesday, August 22nd 2017

The ‘50s, so I hear, were a time of outstanding innovation and growth. Credit cards, diet soda, color television, automatic doors, Velcro, and ultrasound all hit the market then and have stood the test of time. However, in the last 60 years, more has changed with the goods and services we purchase than stayed the same. Paper maps, movie rental stores, getting film developed, and pay phones have all become obsolete in the last decade alone.

A parallel story of equal significance, is that of the change in successful companies over the last 60 years.

  • - Less than 1 in 8 companies found on the Fortune 500 in 1955 can be found on the list in 2016. Only two are in the top 10 for both years – Exxon Mobile and General Motors. The vast majority have gone through: bankruptcy, M&A activity, or simply fallen off the list.
  • - The length of tenure for companies on the S&P 500 is declining year over year. Innosight’s research indicates that in 1965 companies on the S&P 500 average list tenure was 33 years. The average dropped to 20 years in 1990. They forecast 2026 to be 14 years. 

In the age of multibillion-dollar unicorn valuations, staying or getting on the Fortune 500 is still a significant success. Companies that warrant S&P 500 acclaim today can’t keep that status as long as they used to. The speed at which a company’s performance becomes competitively irrelevant, is rapidly increasing.

So what are 3M, AT&T, Hershey, Bristol-Meyers Squibb, Coca-Cola, Monsanto, Pfizer, Weyerhaeuser, or the other companies that comprise the 60 found in both Fortune 500 lists doing that other companies aren’t? If you dig around, you’ll find a commitment to their customers. They all have an ever-evolving business model that grows in alignment with customer/consumer need-states and their ability to meet those needs, over time.

In their research of highly agile companies, Chris Gagnon grounds this concept by stating that agile organizations exhibit: top down innovation, frequent conversations about individual behavioral expectations, and what he calls external sensing. The findings aren’t super surprising. If we can know what changes are happening around us, create new products and services that address those changes, and behave in ways that realize those needed changes, we’ll repeatedly outperform the competition. What the findings don’t acknowledge are all the underlying challenges that make those practices extremely difficult.

Why can’t all organizations stay on top of the F500? The enemies of agility: Hubris, Defensiveness, Dogmatism, and Isolation. Let’s start deep (Hubris), and work our way to the more surface behaviors (Defensiveness, Dogmatism, and Isolation), that keep a company from being agile.

Address Hubris. Being number one – in market share, category, division, or department – is good and worthy of recognition, celebration, and reward. Yet historic success can lead to excessive pride or self-confidence. It happens slowly, over time, and is hard to recognize in yourself. So when historically successful companies are pressed for greater performance, they often double down on what they’ve always done and try to replicate what made them successful in the past. They fail to take a good, hard look at their business operations and capabilities, and marketplace relevance. These company’s fail to see what’s happening around them. Think Hallmark and the dawn of the digital e-card revolution. Or, Kodak at the dawn of digital photos. Not sure if your company is excessively proud and self-confident or at risk of keeping pace with marketplace changes? Here are a few questions to get you thinking.

  • - Does your company dismiss marketplace data or more likely, not even seek it out?
  • - When confronted with data that warrants change, does your company respond with justification and rationale for why those changes can’t be made?
  • - Do you have legacy technologies that are untouchable because the business can’t envision winning any other way?
  • - Do employees with business and customer knowledge/expertise/experience (and results) get a ‘hall pass’ when their leadership is damaging to other leaders or businesses?

If you answered, “Yes” to any of these questions, hubris has already set in and other more noticeable enemies of agility, may be taking root. Let’s look at a few of these enemies and how to overcome them.

Defensiveness. This often emerges when history trumps current data. Marketing doesn’t care what Sales says customers are buying because their iconic brand is more important than current trends. If you are hearing things like, “That’s not how we do things here,” or, “Customers don’t really know what they want” then you are experiencing the defensiveness that will strangle the data you need to grow. When a company dismisses the data and defends its historic position, marketplace relevance begins to wane. Overcome this enemy by: requiring hard data and facts in decision-making settings. Confront historical experience with current trends.

Dogmatism. This emerges when expertise trumps learning. Business strategy is set not because there was dissent and debate during its creation, but because a leader felt he was right, and declared it. If you’re hearing things like, “Don’t question him, he’s always right,” or, “Just do more of it, it’ll eventually work” then you are experiencing the dogmatism that will cripple innovative growth. Overcome this enemy by: normalizing, even rewarding, alternative points of view and varied perspective; create a diverse working environment. Confront the need to be right with the need to learn.

Isolation. The most successful among us, often isolate, assuming that whatever led to their success is “it”. This isolation emerges as a byproduct of over reliance on past results and expertise. The traditional, non-ridesharing, taxi companies were upended by Uber because of this. Little by little, these companies become displaced from the markets they serve. Overcome isolation by regularly checking in. Check in with customers. Competitors. Adjacent opportunities. Your team. Track what you learn and act on it. Confront over reliance with a humility.

10-20 years from now, what list will your company be on? One indicating repeated performance over time? Or just a flash in the pan? Overcoming the enemies of agility will help ensure you create performance that lasts. 

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