Weekly Business Insights from Top Ten Business Magazines | Week 290 | Strategy & Business Model Section | 2

Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 290 | March 31-April 6, 2023

How Do You Drive For Results Now While Preparing For The Future? Avoid These Common Traps.

By Dev Patnaik | Forbes Magazine | April 3, 2023

Listen to the Extractive Summary of the Article

Everything from technology to consumer behavior to geopolitics is evolving at a dizzying pace, posing an existential threat to companies that stand still. Highlighting their balancing act, leaders said they wanted to spend significantly more time on transformation than performance, though in reality the latter took up slightly more of their efforts.  CEOs are right to embrace this paradox. Companies need to both fix the now and build the next. They have to perform AND transform. But that’s a pretty nuanced message to rally people around and it’s a balancing act that most companies will fail to achieve. Rather the three traps companies face in this paradox are:

1. The ‘We Just Have to Get the Basics Right’ Trap.  Some leaders will loudly proclaim the dual mission of perform and transform, then just focus on near-term performance. That’s because they’re inherently more focused on the present than the future. Watch for justifications like, “We have to get the basics right first.”  One way to address this is to separate out the now business and the next business.
2. The “We Took Our Eye Off the Ball” Trap.  Other companies start down both tracks then kill off their transform initiatives. That usually happens when the future-focused plan fails to fit traditional performance metrics that typically have immediate payback. Transformations, instead, have hockey-stick growth curves that likely won’t meet big company hurdles in their early days.  If transformative efforts aren’t reflected in your standard metrics, change the metrics. Include future-focused goals.
3. The “Yeah, Sure it’s Transformation” Trap.  The third trap is the most insidious. It’s when a company fails to undertake any real transformation and fakes it instead: Maybe they’ll dress up parts of their old business in a “transform” wrapper and hope that customers and shareholders buy it.  By encouraging honest, open conversations as part of the company culture, you greatly reduce the chance of faking it. If the emperor has no clothes, someone needs to say so and be heard.

It can seem daunting to fund both now projects and next projects. There are plenty of other things to cut. Most companies have activities and investments that don’t really help performance or transformation. Get rid of them. When you eliminate pet projects and zombie units, your teams will be less distracted and more focused on things that matter.  

3 key takeaways from the article

1. Everything from technology to consumer behavior to geopolitics is evolving at a dizzying pace, posing an existential threat to companies that stand still. Highlighting their balancing act, leaders said they wanted to spend significantly more time on transformation than performance, though in reality the latter took up slightly more of their efforts.
2. The three traps companies face in this paradox are: ‘We Just Have to Get the Basics Right’, “We Took Our Eye Off the Ball”, and, and finally, “Yeah, Sure it’s Transformation”.
3. Solutions are:  separate out the now business and the next business; if transformative efforts aren’t reflected in your standard metrics, change the metrics, Include future-focused goals; and finally, encourage honest, open conversations as part of the company culture, you can greatly reduce the chance of faking transformation.

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Topics:  Strategy, Business Model, Decision Making