So we survived what was a tough 2023. What a rubbish outcome to be proud of. Holding steady is so uninspiring and corporate Australia is by and large so utterly boring. No, not you … everyone else. I guess I should no longer be shocked that so many of our clients smile and outwardly profess a love for their job while in those moments of vulnerability that we at Vibrance seem to partake in with surprising regularity, they confess a preference for sticking pins in their eyeballs rather than having to spend the next few years doing the same thing.
I get that the macro environment isn’t easy. I understand that there are inflationary pressures, high interest rates, and geopolitical uncertainties. And my challenge to those who preach ‘waiting it out’ is to consider history. Free money at zero interest is the statistical anomaly, not the norm. Average inflation in Australia over the last 50 years has been just under 5%, which is not too far away from where we are at right now. We have low unemployment, a stable political system, and are not embroiled in any wars. Does it make sense to await the absolutely perfect economic climate before looking to grow? My broader question in the face of an admittedly bleaker short term economic outlook is why do you give a shit? We seem to tread water or at best make mere incremental gains even when times are good! If we manage to just hang tight during the good times, then perhaps ‘thrive vs survive’ isn’t as related to external conditions as we like to think it is.
We all want our work to have meaning. We want to have an impact and change things for the better. And yet most of our clients tell us that their state of frustration has lasted for years.
“We know what we need to do but just can’t get things done”
“We are constantly attending to the urgent and can’t seem to get to the important”
“We are always so busy being busy”
“We have to fix the fundamentals before we can attend to the more ambitious priorities”
Four quotes from four different organisations. When asked how long their current reality had been in play, the answers were in essence identical – forever. We constantly have to just get over this one short term hurdle and then we will be able to focus on growth, innovation and really making a splash. Just this one short term hurdle. And the next one. And then just one more.
Current state inertia in many large organisations is institutionalised. It is just the way things operate around here. So we re-prioritise, come up with a transformation program, appoint a different executive (who most likely has the same foundational beliefs and experiences as the previous one) and perpetuate the lack of progress that we have been conditioned to accept. Alternatively, we hire in consultants who are freshly arrived from the last organisation where they offered up a PowerPoint deck as their contribution to the cycle of incrementalism.
Most organisations are aware of the old adage that “insanity is doing the same thing over and over again and expecting different results”. They therefore steadfastly avoid doing the same thing repeatedly by varying small details so that they are doing almost exactly the same thing. Moreover, as long as the same thing was 3 years ago or on someone else’s watch, then perhaps it doesn’t qualify as identical. We paint the deckchairs on the Titanic blue instead of red, give them a fancy new age name and expect a boat to fly us to the moon. Show me one game changing corporate success story that didn’t involve radical reinvention or a completely different approach to getting stuff done, and I’ll show you the tooth fairy.
Some of the reinvention stories (distant past and more recent) that tickle my fancy seem almost alien when considered within the context of today’s corporate reality. I love how
Play-Doh was a cleaning product for the removal of coal residue from wallpapers before it transformed into children’s modelling clay
DBS became the world’s best bank by setting out to make banking “joyful” via becoming digital to the core, making DBS invisible, and creating a 30,000 person start up culture
Philips has pretty much divested its legacy lighting business to focus on healthcare technology
Ping An – an already innovative company – further transformed from insurance to create a health ecosystem that meets the elderly care needs of more than 100M people
When I bring up these examples (and many others) with potential clients, the initial reaction is almost identical. We are not like them. Our Board context is different. Our industry is different. My core business is bleeding. I have key talent gaps. Blah blah blah. I bet that every business that has successfully transformed itself into a powerful growth engine could have thrown up quite similar concerns. The difference is that they chose not to. They chose to dream big and act.
So what is 2024 going to look like? If your own corporate history is to be believed, 99% of organisations will do more of the same and either go backwards or just maintain their current position. Most of the executive teams in those organisations will delude themselves that this year will be different, or they will say it outwardly and deep down be wishing for those pins to stick in aforementioned eyeballs. What are you going to do in 2024 to transcend your institutionalised inertia?
The excellent book on strategy called Beyond The Hockey Stick clearly establishes a link between disproportional returns and what the authors refer to as “bold moves”. What is your bold move going to be for 2024? And is it truly bold or simply a paint job?
This is where leadership becomes relevant. It takes genuine courage to commit to something radically different. The safety net of familiarity and reliable precedent seemingly disappears, but this is where I quite often find myself at odds with my clients. Corporate leaders often associate ‘radically different’ with increased risk, simply because it lies beyond their experience. However, if the data categorically shows that a failure to embrace bold moves directly correlates to a relative erosion of economic profit (total profit minus the cost of capital), then incremental ambitions are akin to a wilful destruction of value. This is not leadership. Our view is that leaders who don’t embrace “realise different” – both in terms of ambition and also a radical change to how they execute so as to break their institutionalised inertia – are failing to fulfil their leadership responsibilities.
Once upon a time we ploughed the fields and laboured in the sun to simply put food on the table and a roof over our heads. That was work’s meaning. For good or for bad, we have evolved so that work now needs to have a more extrinsic purpose, and status quo for the majority of us does not fulfil that need. We are desperately searching for bold corporate leaders. Not just to change the world for the better at the macro level, but also to move our organisations forward, provide our waking hours with meaning, and create environments conducive to pin-free eyeballs.
How are you going to change the game in 2024? I promise you that it won’t be by doing what you already do but just a little bit better. Nor will it come from deluding yourself that you are playing a different sport because you changed the colour of the ball.
Sahil Merchant
A proven entrepreneur, an innovator, and an expert in agility, growth, and new talent. Sits at the intersection of large corporates and fast moving disruptors.
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