One of the biggest issues that modern business leaders face is inertia. In the context of business, this means that companies resist change unless someone directly pushes for modernization. More so than ever before, inertia can cause a formerly successful company to crumple.
Modern markets change very quickly. As a result, companies need to adapt to new business environments and shifting customer expectations if they want to stay relevant. Otherwise, another organization will swoop in to fill the hole and steal the market.
Business leaders need to learn how to recognize inertia so that they can be the outside force necessary to effect change. Some of these signs include:
1. Satisfaction with the status quo.
Companies can fall into an inertia trap when they become too satisfied with the status quo. When everything seems to be going right, organizations can take time to celebrate, but then the task transitions into looking ahead. This is the time to invest in innovative ideas and industry-redefining ideas.
While not all of these ideas will pan out, they put companies in a strategic position to respond to sudden changes in the market and help them avoid being blindsided. Market demand will certainly change. Companies need to have enough side projects going on to pivot.
A great example of satisfaction with the status quo is Blockbuster. The company continued to open physical locations instead of responding to game-changing ideas like Redbox and Netflix.
2. Paralysis of market analysis.
Many business leaders recognize that there is such a thing as strategic inertia. Sometimes, it makes sense to avoid change for a period of time while preparing for the future. However, this break must be brief.
Too often, companies become paralyzed by their investment in market analysis. It is pertinent to research and engage in discussion before moving forward with new ideas. However, it is very easy to invest too much time in this process.
Overthinking can prove just as devastating for a company as underthinking. Waiting too long to make a move means wasting both time and money, not to mention the opportunity to bring something truly innovative to the market. Excellent business leaders know when to move past analysis to the action phase.
3. Adherence to tradition.
Tradition does have a certain role to play in companies. However, business leaders need to think critically whenever they hear that something is being done in a certain way only because that is how it has always been done. Tradition means respecting and honoring the past, not adhering to it blindly.
Leaders need to identify when traditions are a detriment and push for change to make processes more efficient and more effective. The heart of today’s most successful companies is innovation, not tradition. Business leaders who embrace tradition blindly put their organizations at serious risk.
4. Lack of communication.
The culture of many organizations prevents individuals from speaking up when they have ideas or questions about how things are being done. This silence is actually a sign of inertia. Employees are the people who ultimately push companies toward innovation.
Companies benefit when many different perspectives come forward. No one single person will have the ultimate answer to a question. The ability to crowdsource potential solutions is what makes companies so strong.
Business leaders need to keep the doors of communication open with employees and invite feedback and suggestions from anyone who has something of value to contribute. While not all comments will lead to change, individuals may be surprised at the source of the most innovative ideas.
5. Organizational tunnel vision.
Most business leaders will recognize that tunnel vision leads to inertia. Too often, companies embrace an idea of what their employees or target customers look like and become blinded to other possibilities. When this happens, diversity in the workplace becomes stifled and important opportunities for business expansion will be missed.
Leaders need to keep an open mind, especially when it comes to recruiting and sales. Often, hiring people with new perspectives leads to new market opportunities that were never before considered, as well as products that appeal to a larger number of people. Whenever it becomes apparent that an organization has tunnel vision, leaders need to ask how they can shake things up and bring in new viewpoints.
6. Investing in failing projects.
The best business leaders know when to cut their losses. Too often, companies continue to throw money at a problem hoping to save it long after it has passed the point of salvage. Letting go of a project that has consumed a lot of resources can be difficult. However, investing more into it will only make the eventual failure that much more damaging.
Companies need to keep looking at the long term instead of focusing only on the present. When leaders do this, they will more easily see when a project needs to be abandoned instead of getting wrapped up in efforts to save it. Continuing to put money into failing projects will jeopardize the trust between leaders, employees, and investors. This could put the entire company at risk.