Are you Sears or Amazon?
On May 15 1997 Amazon, a struggling online bookstore, went public with an IPO that valued the company at just over 400M$.
In October 1997, Sears was the second largest retailer in the United States, posting third quarter profits of more than 300M$.
Sears had already cut circulation of their famous general merchandise catalog, had been selling off assets in Mexico, and by 2003 had sold off their failed retail credit card business. The writing was on the wall for Sears, yet the company continued to operate and see consumer habits as they had been over the past 120 years.
Amazon however, invested heavily in new areas like Amazon Prime, Amazon Web Services and Alexa voice computing. Opting to concentrate less on net income, and more on growth in new areas Sears, and other brick and mortar retailers, were not.
Fast forward to today, and Amazon is the biggest company in history, and their clairvoyant leader, Jeff Bezos, the richest man in the world. Sears, has filed for bankruptcy in Canada, and their US business is in danger of following suit.
Economists and retail experts have been furiously hypothesizing on just how and when the demise of Sears happened.
Ultimately, we can resume the difference between these two juggernauts of their industry with one sentiment, “Adapting to Change.”
Amazon made it part of their core principles to not only adapt to change, but to foresee it and plan for it. Sears, relied on a business model that has always worked, and kept holding out hope that it would return the company to profitability.
The case can be applied to all businesses.
Are you prepared for Change?
Regardless of the industry, the corporate culture and even the people, businesses everywhere are faced with change, and these days, more often than ever before.
Millennials are taking the place of baby boomers in management positions, buying habits are changing everywhere, management styles that worked in the past just don’t have the same impact in this changing paradigm.
Businesses experiencing growth have to deal with change to manage that growth effectively and businesses facing environmental pressures have to deal with change by adapting to their environment.
At the root of all this change, is ultimately the people that make a business run.
Therein lies the problem, human nature is to resist change (as anyone who makes a new year’s resolution to lose weight will tell you by February 15). We are all creatures of habit and even if we could go back in time to show Sears what was coming, there still would have been resistance from their people, at all levels of the organisation, to change their business model to address these changes.
Dealing with this resistance before implementing change is therefore the most important part of any business improvement initiative, but even more so when addressing organisational development.