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Need to reinvent your traditional business? Be ready to do these three things

I asked here last week: what makes big, established businesses so reluctant to change in the face of overwhelming new realities in their markets? Their customers may be moving on rapidly, but so many large corporations hang on doggedly to the past. Their widely experienced board members and highly paid executives just refuse to get on board. What’s that all about?

It’s about the ingrained resistance, seemingly wired into our brains, to change whatever is thought to be a good thing. Once a particular way of doing something has proved successful, even very accomplished leaders find it difficult to accept that everything has its time. When technology changes consumers, those consumers will change businesses – or destroy them.

This is exactly why innovation is so rarely done by the big and the comfortable. To change something, you have to be the one not benefiting from it. If it feeds you, you will leave it alone. It’s the hungry ones out there who look on and try to arrange an upending.

It doesn’t have to be so, though. Let me tell you about one giant that has done exactly that – learnt a new dance. First, a personal story.

I remember it well, even though this was many years ago. I had just flown back from London, where I had happened to pass a new Apple Store on Regent’s Street. I had popped in for a look, and found myself playing with the many sleek computers on display. I looked on as menus popped easily, interfaces were intuitive, icons were clean and stylish, and the whole thing was just so damn easy to use.

Then, back home, I opened my clunky computer running the (then) new Windows Vista software, and watched it crash for the nth time. OK, Microsoft, we’re done, I muttered. Enough of your over-engineered, buggy, geeky software. I’m going for ease and for style. I bought a Mac laptop and never looked back.

I wasn’t alone. Soon, Apple was throwing out a mind-bending array of innovative products – iPods, iPhones, iPads and the like – and it went on not just to dislodge Microsoft from the top of the tech heap, but left it trailing far behind. Under its overconfident, headstrong leader of the time, Microsoft missed many boats: cloud computing, mobility and simplicity. It looked like it was entering a deadly spiral.

But then its board took action. Headstrong leader was retired, and an unknown one was promoted. Satya Nadella took over the reins, and within a short period rapid change was in the air. Over just five years years he has managed to totally change the ethos of the business, moving it to a cloud-first platform and making it open to collaboration with anyone. Late last year Microsoft actually pipped Apple in market value, briefly regaining its crown as the world’s most valuable company. The two are neck-and-neck again.

I never thought that could happen. But here we are. How was it done? Three quick lessons.

First, humility. Admit you got it wrong. Drive out the arrogance. That’s the only way to change. If you’re still blowing the old trumpet, there’s no way you’ll pick up the new one. Start learning about the new world and its imperatives, quickly.

Second, guts. Get ready to stop things and break things. Nadella wrote off his mobile phone business quickly and put an end to most of the old ways of selling software. He forced the old guard to become platform-agnostic and play nice with everyone – the hated Apple included. He didn’t flinch from change; he knew survival was at stake.

Lastly, people. This is the one most game-changers miss. Even as you reinvent the business, you will need to win hearts and minds; you will need to protect values; you will need to blend old and new. Nadella knew this very clearly. His task was not to start a whole new Microsoft; it was to convince the old one to embrace change. He set upon a rapid cultural change programme, with great empathy and openness, in tandem with a new strategy. He knew the latter would not fly without the former.

So there you are. It can be done. Even awkward old giants can learn new dances. What’s needed is leadership that understands that corporate reinvention is a peculiar combination of being humble while being brave; and managing the hopes and fears of human beings while rethinking technology.

(Sunday Nation, 17 February 2019)

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