Fast is the new big!

If you go back a few years, the maxim that large companies had the best chances on the market often applied. Size was almost a guarantee of success. In the last three decades, however, we have seen many large companies fail. Gradually, the realization has set in that the companies that are best positioned are those that can adapt to new circumstances as quickly as possible. The digital revolution has further reinforced this and I think that the speed of adaptation is now the decisive factor in whether you can meet the needs of the customer. In both large and small companies.

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As an entrepreneur, how do I ensure that my company is quickly adaptable? I think the following points (not exhaustive) are important.

Awareness of change

Many older employees were socialized during the economic boom and absorbed the paradigm of economic growth, a stable environment and existential constants with their mother’s milk, so to speak. However, the last few decades since the Second World War have been an exceptional economic period which, with secure jobs and a steadily decreasing workload coupled with constantly increasing prosperity, created a material reality that does not actually exist.

Today, where we live in saturated markets, this stability is increasingly disappearing and permanent change is once again perceived as normality. This is good, because it creates an awareness of the need to constantly adapt to new circumstances.

Culture

The way in which a company’s employees react mentally to this change is defined by the (employee) culture. If you, as a CEO, have a lot of older employees who were socialized in the aforementioned era and have perhaps successfully persuaded younger employees that this is the reality, then you have a culture problem.

It is very difficult to establish this willingness to change, which of course also brings with it a great deal of perceived uncertainty, in the company. In most cases, no amount of hard work will help, because cultures clash. It is your social responsibility to take such employees with you on the path to change. However, it is also your duty not to impose your world view on these employees. This is an area of tension in which it is sometimes difficult to find good solutions for everyone.

Structures

Today, organizational structures determine whether a company is flexible or not. I no longer believe in multi-level management structures and x departments. I experience every day in large companies how much this whole organization gets in the way of the actual doing and how quickly the employees, even the good ones, get lost in the whole cosmos of self-created rules and processes and at the end of the working day have the feeling that they have really done something for the company.

Of course, that’s an exaggeration, but unfortunately that’s exactly how it is at its core. Instead of maintaining such rigid structures, it is better to create small teams that work autonomously and with a focus on results. The difficult thing is that this only works with a high degree of personal responsibility on the part of the employees.

Investments

The time of big investments is over. Investments are always made on the basis of an assumption about the future. However, as change is progressing much faster and new technologies are changing the parameters ever more rapidly, large investments run the risk of being financially committed to a certain strategy once it has been adopted.

If, for example, a new technology comes along and changes the market, this can very quickly have catastrophic effects. Nuclear power plants and dams are a good example of this. Both have to be amortized over decades, as the immense construction costs cannot be passed on otherwise. If we now look ahead, say to the next 50 years, what are the chances that a new technology will become marketable that makes it easier and cheaper to produce electricity? The chances are very high, quite simply because technological development is progressing exponentially, but we don’t realize it because we think that the past can serve as a benchmark for the future.

It is the nature of exponential development that for quite a long time you don’t even realize that it is not linear. We therefore base our investment criteria on this historical linear perception. We are therefore fundamentally deceiving ourselves and that is precisely why it is so dangerous.

So be radically careful, it pays to take small steps, but to take them often.

Agile enterprise

With the culture of small steps, agile is of course not far off. In fact, I think that agile processes make companies more agile and flexible. There are very few companies, especially outside the technology industry, that have switched from rigid processes and structures to agile methods and flexible teams. Admittedly, it’s not easy either.

I hope these points can help to make your company agile and quickly adaptable. The size of your company certainly has advantages, but in the transformation process towards more agility it is first of all a mortgage that has to be paid off.