I have written in the past about the need for change in an organisation being driven by strategic change outside. A recent article in the Harvard Business Review on Transient Advantage by Rita Gunther McGrath (one of my favourite management authors) shows that there are internal drivers for change which are just as powerful. This is particularly relevant for Fast Growing businesses.
McGrath identifies 5 stages of growth and decline that an entrepreneurial business goes through to seek and exploit a competitive advantage. She argues that a sustainable advantage (one that once secured is there for ever) is a fallacy and that competitive advantage comes and goes as markets and technology change. To continue to be successful a business should cycle through a number of competitive advantages by repeating her stages of growth and decline.
This has an important message for managers of growing (and declining) businesses: there is an internal cycle of change that you should be planning and executing to seize, exploit, and discard your competitive position. As well as planning any changes as a result of external drivers!
McGrath’s stages represent a strategic journey where senior managers are preparing for the changes to move on to the next stage at the right time. The internal changes are thought through to respond to the development of the companies competitive position. Fast growing companies in particular should be preparing to change to the next stage so that they can make the most out of their strategic advantage. Even if you decide not to follow the stages suggested by McGrath, there will be stages in your growth which require significant change in your business organisation. Are you proactively planning for them?
And the point is?
Every organisation should have structural strategic changes that it needs to make as it moves through time. Its not just businesses that need to consider structural change: long term policy shifts affect central government, local government and agencies. For instance I recently found out that there has been a significant decline in the number of fires the Fire Brigade have to deal with, over a third in the last decade, and an increase in attendance at road traffic accidents. Brigades have have taken on new roles; such as processing speed limit violations collected by volunteer speedwatch teams to help reduce traffic accidents.
Have you thought through the long term structural changes needed by your organisation to adjust to trends and cycles inherent in what you do? These changes need to be included in strategic change portfolios as part of the mix needing prioritisation.