So much has been changing. The financial crisis upset the economy. Government regulation has become more prevalent. And, there have been rapid changes in technology, such as social media's remarkable growth. In fact, it almost seems as if everything is changing.
Even with such profound change, however, some things do remain the same.
Yet, seemingly ubiquitous change compels companies to concentrate on crafting the appropriate responses for competing successfully in the new environment. And, rightfully so. No one wants to be left behind while competitors capitalize on the shifting conditions. Thus, identifying and making appropriate responses to change is crucial.
While adapting to the new landscape, however, companies can easily focus so heavily upon what is changing and almost fail to notice that some things do stay the same. But, when making strategic adaptations in today's vastly changing world, companies should strive to avoid losing sight of what has not changed. In fact, sometimes, paying attention to what has not changed can be exactly what is needed for success.
This is evident in the business success and failure patterns which I have been researching for 20+ years to identify Winning Moves. There are patterns that held true in the past and still hold true today. Adhering to these patterns can bring tremendous success; ignoring them, failure. So, these powerful patterns should not be forgotten when a company is deeply absorbed in responding to change.
For example, sticking to and building upon a company's strengths is one of the success patterns that emerges from my 20+ year study. Similar findings also come from research conducted by others. And, although this pattern held true years ago, despite all the change, this pattern is still associated with success today.
Wal-Mart's recent performance illustrates this point. Wal-Mart has been striving for growth by trying to attract more affluent customers. But, unlike Wal-Mart's spectacular success rolling out new stores in the 1970's (discussed in this newsletter's previous issue in January), Wal-Mart's recent foray into more affluent markets was a disappointment that shows how patterns of the past still do apply today.
In its elusive pursuit of growth, Wal-Mart went after more affluent markets where it lacked strengths. In doing so, Wal-Mart repeated a pattern that brought others disappointing results many times before. Business history is littered with companies that met with failure when attempting to expand outside their areas of strength.
Furthermore, in straying from its strengths, Wal-Mart repeated the exact same misstep that its rival K-Mart made years before. Back then, K-Mart, a discounter with strengths in low end markets, tried to enhance its growth prospects by pursuing more upscale customers. K-Mart was not successful in upscale. But with its new focus on upscale, K-Mart lost sight of its traditional markets, and left the door wide open for Wal-Mart to move in on K-Mart's turf. And, that's exactly what happened. Essentially, K-Mart got out of Wal-Mart's way, making it easier for Wal-Mart to successfully expand in, and eventually dominate, the low end of the retail market.
Like K-Mart's move into upscale, Wal-Mart's recent bout with more affluent markets essentially left the door wide open for other downscale retailers to expand more easily in Wal-Mart's traditional markets. Thus, retailers like Dollar General were able to do well in downscale, while Wal-Mart struggled chasing more affluent markets--just like K-Mart struggled pursuing the affluent years ago.
This is a classic case of history repeating itself. And, it is happening right in the midst of a sea of change. It illustrates a key point: despite all the change, some patterns from history continue to repeat and remain unchanged.
So, as companies strive to respond to today's many changes, they should be careful to avoid a really common mistake. They should not get so wrapped up in the changes to the point of forgetting valuable patterns that still remain the same. They must pay attention not only to what changed, but also to what did not. Even in today's rapidly changing world, some things do not change.
La Grange Park, IL