Lessons from Nokia, Blackberry: If you plan just for survival your business will die

A Harvard Business School study showed some time ago that over 80 percent of the reasonsrevenue growth may stall in a company are internal and within management control.

An intuitive belief in this led many businesses in the past (particularly in the postlicenseera) to focus on building leadership ability and organizational capability.

There is nothing wrong with that. It’s just that with the exception of the smartest businessleaders, most looked inward, and channelized their energy on managing internal issues and afew ‘important’ external elements such as relationship with key customers, suppliers and banks.

Businesses were built painstakingly and over a long period; stability was very important andeverything else could wait.

VUCA World
That world seems to be nearly gone. Today, ambitious businessmen know they cannot afford toneglect building ability and capability, but it’s no longer the key part of the puzzle.

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The external environment now plays a much larger role than ever, regardless of the sizeof business. The phrase VUCA is used too often to describe our world today-volatile, uncertain, complex and ambiguous.

Managing the VUCA world effectively seems to be essential to staying on the path of growthand even accelerating it, while not being able to do so, may sound the death knell.

If you have been reading about what has happened or is happening to companies such asMotorola, Nokia and Blackberry in one visible sector or what happened to Kingfisher Airlinesin another you would know what I mean.

Large companies are reengineering themselves, shaking off flab, changing their age-old processes and being less emotional about their product portfolio.

Small companies, particularly those with an aggressive approach to the role of technologyin business are making a big deal out of their size and trumping the market.

The common thread between companies beating the ’new normal’ is what I call agility, which is critical to responding to the constant change-internal, immediately external and far external.

Survival is not the key
What if your business is not agile? Simple, it is fragile.

Be sure to understand this - fragile does not mean broken or damaged. But before you sigh inrelief, wait.

It’s a more, not less, dangerous state to be in than to be broken. If your business is broken (such as going from black to red suddenly or facing an exodus of smart people or with a machine breakdown), you can wake up and take action to fix it.

Brokenness is visible, fragility is not.

Most businesses remain in what we at Friends of Ambition call the stage of Early Success fora long time where nothing seems to be wrong, customers keep buying at a stable price, suppliers increase price only once in a while and business appears to be stable.

Unfortunately, stability is often fragility in disguise. It’s as if you are walking on a railway track, everything appears calm and then you hear a rumble and out of nowhere a train is on to you. In many businesses, in fact, I would say in the VUCA world, in all businesses, it’s time to be concerned about stability, not be pleased about it.

Intel’s Andy Grove wrote a book on a similar subject 15 years ago - Only the Paranoid Survive. In today’s world, I would say, if you plan just for survival, your business would sooner or later die.

I guess this is how the Chinese manufacturing train caught up with the rest of the world, including many manufacturers in India, which was ambling on the tracks.

Most businesses start agile. Why and when do they turn fragile? Is fragility inevitable or can it be avoided? Give it a thought.

The author is co-founder and managing partner, Friends of Ambition, the business growth platform for Middle India.

This article first appeared in Entrepreneur India magazine.