“It’s not Essential for a Company to Change”

Two-thirds of major corporations will fade away over a quarter of a century, as business indices witness.

Why do they fall prey to creative destruction? The main reason is found in strategy work.

Quite apart from companies whose strategy work is practically non-existent or is number-crunching with no real substance, even those companies that conduct serious work may fail.

Why is that?

People feel safe with what has proven to be useful. So companies easily repeat or face-lift their earlier strategies. But the environment and assumptions have changed. It is very unlikely that the factors that once created the current prosperity will continue to work in the future. That is the Paradox of Success.

As Gary Hamel aphoristically summarizes: "Companies are successful until they are not."

No matter how good the procedures and tools are, even the best of strategies are worth nothing if an organization itself is not able to renew. The ability to continuously adapt to the changing environment is essential to survival.

All the same, another alternative still remains*:

"It's not essential for a company to change. It can just die instead"


* Advertising agency PHS in their invitation to an innovation seminar, Helsingin Sanomat 2005