Do Companies bring Change by choice or under compulsion of a crisis?

“Change” is the most celebrated word across the world – from individuals to communities, corporates and countries! But, how serious are we, when we say “Change”?

Change encompasses innovations, ideas, redefining, reviewing, restructuring and redeeming! Change represents a dynamic state and breathes new and fresh. Catch phrase of nearly every celebrity is “Change is the only constant in universe!” Such splendid is the significance of change; but unfortunately it is seldom understood in its entirety!!

If companies are not changing proactively, then they face decline in 5 stages, as per Jim Collins, author of best seller “Good to Great”:

  1. Hubris born of success
    Great enterprises get insulated by success, though momentum already set in carry them forward while their leaders lose discipline and make poor decisions. This stage kicks in when people of these companies become arrogant and believe that success is their entitlement!
  2. Undisciplined pursuit of more
    This stage comes, when companies start to think we are great and we can do anything! They go for more scale, more growth, more acclaim and all what bring pat on their back from those in power. All these happen in undisciplined and reckless manner.
  3. Denial of risks and peril
    At this stage, internal warning signals begin to mount but external results of the company remain strong. Management explains away disturbing data or declares difficulties as temporary.
  4. Grasping for salvation
    Now, decline of the company becomes visible to all and talks of salvaging begins.
  5. Capitulation to irrelevance or death
    At this point, enterprises start to face threat of extinction. They struggle to survive.

Paradoxically, most companies are unaware of their decline that creeps in during 1st three stages! By the time crisis is visible at 4th stage, they are already deep into the same!!

General Electric and Toyota Motors of Japan are some of very few companies, who have been proactively changing and hence ever thriving. Apple Inc., Intel and Samsung are among those, who did dip to stage 1 or 2; but bounced back by quickly by adopting changes. IBM, HP, Xerox, Merck and Numec were iconic companies at one stage but fell to stage 4; however their leadership showed courage to stage a comeback. However, one time icons like General Motors, Ford and BlackBerry are among those, who have been languishing at stage 4 for substantial time and no one knows whether they would ever be able restore their old glory. On the other hand, one time gems – Arthur Anderson, MCI WorldCom, Pan Am, General Foods Corp., Compaq, RCA etc. went down to stage 5 and became extinct!

It is apparent that most company may clamor and claim for change proactively, but they actually change only when they are in crisis and hence, run risk of not reaping fruits of change and chance of their success is odd.

It would be highly interesting to know that even decline of a successful individual happens over 5 stages:

  1. Getting overwhelmed by success and becoming opaque to realities – superiority complex!
  2. Clamoring for more successes, ignoring steps followed to climb initial success – overconfidence!
  3. Denial for presence of defects and difficulties – arrogance!
  4. Start to worry about increasing woes – anxiety!
  5. Loss of identity – condemned!

What does above scenario reveal?

Change under crisis is compressed but quick!

A crisis brings do or die situation! At any scale from nations to natives, under crisis, one either swims or sinks!!

It is ironical but true that the brink brings out the best or worst. Changes under crisis are costly but very quick. History shows that great innovations, ideas, courage, cohesion and all what we call as Change came about during wars or setbacks.

Here below are pros and cons of bringing change under crisis:

  • Crisis presents a binary situation – bounce back or get banished.
  • Changes, which happen, are costly, compressed and concentrated, since focus is on coming out of crisis. These changes are often not wide spread.
  • A by-product can often be good momentum to progress, which continues beyond a crisis. That is good.
  • But all of above may not be good enough to change character or DNA of country, company or individual.
    This poses high risk for entity or individual to go into cycles of successes and setbacks.
  • One of the most serious implications is while in crisis people tend to lose balance and belief in good. Prudential principles and practice can take a back seat or beating! 

So, crisis is a great initiator or destroyer, but not a creator! Creation of new or different comes only post extinction!!

Changes by choice are expansive and elite!

Changes by choice means changing proactively through contemplation, self-evolvement and self-drive! Doing it by choice brings ownership and motivation.

Change by choice is no longer a change by charter, as happens under crisis; instead it becomes a change of character and culture!

Often companies or individuals, despite good intention to change by choice, trip midway because their attempts to change is non-inclusive. Look at some examples, which are doomed to failure:

  • Change in favor of empowerment; but not having trust on who to be empowered!
  • Resolving to be sensitive to employees, but with lack of empathy!
  • Promising fairness; but not being free from biases!

So, when change happens by choice and is inclusive and expansive, then it is sustainable and supremely beneficial from all aspects!

So, why not change by choice, instead of waiting for crisis to coerce us?


6 responses to “Do Companies bring Change by choice or under compulsion of a crisis?”

  1. Sudhir Agashe Avatar
    Sudhir Agashe

    Well said Mr. Lohia. Unfortunately we have also gone till phase 3 and bounced back. But the fact always bothers me “How not to forget mistakes in past without being in history” any thoughts on this, please share. I truly appreciate your thoughts and always encourages me for additional efforts.

    1. Murli Avatar

      I highly appreciate and admire your valuable views!

      I am glad that you/your institution sprang back from stage 3. That reflects your courage and leadership qualities.

      To not to forget mistakes going forward, the biggest mistake most of us do is to feel wary and worried of mistakes. Instead embrace mistakes; if these happen (not that you would do is purposely), treat these as eye openers, opportunities to learn what is still wrong. 2nd step is to learn lessons – what caused mistakes and make those lessons part of your life here and now. Never please postpone to imbibe lessons. If you do that, you would automatically remember those. It may also be a good idea to document mistakes and lessons learnt and then review it time to time.

      Hope, this would help!

  2. Rudra Avatar

    Right at the center of the post, I found that ever so genuine phrase “by adopting changes”. Changes are inevitable and bound to happen… what matters most is how you “adopt” the changes.

    Would I be wrong in saying that, one should not bring change by choice or under compulsion, but as per the “situation”?

    Nice ‘change’ post!!


    1. Murli Avatar

      Many thanks for your comments!

      Let us analyze what we mean by “bring change by situation”. It means that one should wait for situation to come. If situation prompts you to change, it implies that you are not in driver’s seat; situation is. Most of such situations would then be a kind of crisis, which compels (one may call it – prompts) you to change. As mentioned in the post, irony is that you would not be able to see situation, until you reach stage 4! Not initiating actions or changes proactively means that you are reactive! Is that what you are advocating?

      I hope, I have been able to clear the situation.

      1. Rudra Avatar

        Yes indeed, you cleared the situation pretty well 🙂 and I fully agree with your response!

        Of-course I wouldn’t want to ‘wait’ for a situation to bring change. I would bring change, and would bring it most probably by choice, but that change will be according to the current situation.

        I mean why fix it, if it’s not broken! But that doesn’t mean I will wait for it to break.

        If a company keeps bringing ‘adhoc’ changes by choice, without keeping in mind the situation (current or future), that isn’t good either, right?

        So whatever you do, bring the change or be the change – play the situation well!

        Please let me know if I got the essence of the post right or have gone into another planet?? :-O

        1. Murli Avatar

          I appreciate your good understanding.

          Some thoughts to share – there is a contradiction in 3rd para. You have stated you would not wait for it to break. It means that you would fix it advance. You often can’t figure out when exactly it would break; hence, you should fix as soon as you believe you should do that. That is what “doing it by choice”!

          People often confuse “changing by choice”. When you change by choice, you do it consciously, after due contemplation! In such a case, it can never be adhoc! Adhoc has elements of whims, fancy, bias etc. and hence often prone to problems!!

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