Sudden Shifts In Business Paradigms

Sudden changes in business patterns can also be disruptive to your organization. Your contingency plan should take them into account. Two examples are disruptive technology and bad mental models.

Disruptive Technology

Two ways to counter disruptive technologies are to constantly reinvest in your own research, always looking for new ideas and ultimately new products, and to continuously improve the products you have. By looking outward you are keeping a finger on the pulse of what is happening in other industries. The approximations to your business become apparent if you pay attention. If you reinvest in your own research, you may find the solution first or you may become the disruptive influence for another industry. Finally, by reinvesting you make it difficult for the competition to enter the market by setting the standard for the product. Make the cost of entry so high for competitors that it is not worth the effort.

Bad Mental Models

Often businesses are forced into contingency planning because they have been operating with bad mental models. Peter Senge first brought the concept of mental models to the general public awareness. The same concept applies to how a company does business. It is a bad sign when emergency actions are required and there is no plan. An unplanned emergency situation comes from a company with lethargic management. Several things may be happening at one time. One thing to watch for is discounting or downplaying the possibility of danger. Management teams sometimes discount the possibility of a serious situation ever happening to their company. It will always happen to the other company. Not so. Downplaying or underestimating the problem is equally dangerous. The rule of thumb in business is that a problem doesn’t go away. It only gets bigger.

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