Business as Usual
All enterprises face a fundamental tradeoff. Do you invest in getting better and better at the products and services you already offer? Or, do you invest in creating innovative new products and services? The obvious answer would seem to be some mix of both.
However, getting the mix right is rather difficult. This difficulty is captured by the answers I have received from hundreds of top executives to the simple question, “What keeps you awake at night?” The predominant answer is, “How do I run the enterprise I have while trying to create the enterprise I want?”
The source of this tension is the need to invest every available dollar, and often more, into maintaining the competitive positions of your existing lines of business. Innovative new products and services are the losers in this competition. Every dollar has to go into the red ocean combat for sustaining market share.
That is what Xerox, Nokia, Motorola, and Kodak did – and they all failed. They left their potential innovations on the shelf to milk their current competitive advantages. They invested in getting better and better at delivering current offerings, while their customers wanted less and less of these offerings. They thought, if only implicitly, that business as usual would prevail. It never does.
The astute chief executive has to balance the arguments of the stewards of the status quo and the audacious claims of the “wild Turks” who want to upend everything. This is not easy, but it is essential. Innovation eventually wins. Business as usual eventually loses. The real difficulty is when business as usual has consumed all the money and energy before its demise. Then, the enterprise itself faces creative destruction.
