Okay. So, I’m going to start by admitting that my heading was a hook.
Here’s the deal — the notion that “change is bad” is blasphemy in today’s world of business. In fact, change is one of the most proliferated subjects in blogs, books and social media chats. I understand why, and so do you.
Change is vital to progress in every field of endeavor. Without change, stagnation sets in. This explains why it is so easy for people to become caught up and desensitized by the “change is good” paradigm. Well, change is not always good. Change can be bad. Very bad.
There are plenty of examples where radical change has either destroyed a company or brought it to its knees. Coca-Cola’s 1985 decision to change its time-honored formula is the biggest blunder in corporate history. New Coke lasted 79 days before the original formula returned to the market. Kudos to CEO Roberto Goizueta for having the good sense (and the courage) to kill his darling and reinstate Coke Classic.
So yes, with change comes good choices and bad choices. More importantly, change should not consume every aspect of a business at the same rate or to the same degree. Leaders ought to be wary about bringing change to vibrant cultures, the positioning of brands, and effective business models.
Would You Change the Culture of Google or Zappos?
I consider Google a tier-one innovator. This company is constantly searching for revolutionary new products and services. Concurrently, Google relentlessly works at upgrading its workplace and its workforce to facilitate exponential growth. This initiative isn’t change — it’s improvement.
At Zappos, CEO Tony Hsieh has set his cultural sights on a holacracy management system, a radical change from conventional structures. Is Zappos there yet? No. Despite Hsieh’s dissatisfaction with the rate of change, he views holacracy as the starting point. Hsieh is still hellbent on achieving a world of self-management and self-organization, but not through more cultural changes — through quicker evolution of that initial change.
Change and continuous improvement happen to be inherent in the Google and Zappos DNA. Said another way, change is the status quo.
When Should a Brand’s Positioning Change?
By nature, marketing people are dynamic and impatient. They love to put their mark on the brands under their roof. This leads to change for change’s sake. I’ve seen it happen time and time again. Package graphics and advertising campaigns change far too often. So does core brand positioning. Changing brand positioning is usually premature and almost always a mistake.
Okay, you might say, what about the argument that we should fix a brand before it breaks? Not when it comes to positioning. A change in a brand’s promise confuses customers. Confused consumers are a brand’s kiss of death. You fix brands before they break with innovations that add value and fortify the brand’s raison d’être.
Twenty years ago, Nestlé could see that the instant coffee market was broken. They didn’t tinker with advertising or positioning to reverse the downward slide of the category or their brands. Nestlé turned to product innovation to fulfill the convenience needs of coffee lovers. They found a novel way to deliver great coffee instantly. Nespresso did not take Nestlé outside of its core competence or its strategic brand positioning. The breakthrough into single-serve pod machines enhanced the positioning and delivered more than $5 billion in annual revenues.
When Should You Revamp Products and Services?
Leaders with great foresight know when to change a business model, but few have the courage to do it when everything seems hunky-dory. Procrastinators with weak backbones avoid making the tough call and end up like Blockbuster, Borders, Kodak and JCPenny — bankrupt or near to it.
You likely wouldn’t consider the retailer Target anywhere close to these shadows of their former selves. Neither would I until I witnessed Target’s recent entry into Canada. Target crossed the 49th parallel with a lot of fanfare. Canadian shoppers welcomed the chain with open arms because they had enjoyed shopping at Target in the U.S., but Canadians didn’t find that particular Target on Canadian soil. Target decided to change for Canada with a much different product assortment and higher prices. Within two years, the retailer threw in the towel, closing a 133 stores and putting 17,000 employees out of work. This was a $5 billion mistake. Target thought change would be good thing. Not so.
As a management principle, change ought to be the status quo. When leaders have made the daring calls and worked hard to make them successful, they no longer fear the unknown. Their eagerness to find the next breakthrough bubbles to the surface and it becomes contagious. Why? Because the right change at the right time and place gets their companies to the future first.
For more on transformational leadership and change management, check out my new book, "Do Less Better: The Power of Strategic Sacrifice in a Complex World."