Change Isn't Waiting: Weighing up bold leadership from Amazon vs dated leadership from Yahoo!

12/05/2016 10:24 am ET Updated Dec 05, 2016
By Photo credited to the firm Levy & fils by this site. (It is credited to a photographer "Kuhn" by another publisher [1].) (the source was not disclosed by its uploader.) [Public domain], via Wikimedia Commons

As Amazon looks to expand the already dominant market share it already has, with plans to open 400 new brick-and-mortar bookstore locations and explore pickup locations for groceries, fellow digital conglomerate Yahoo! is in the midst of deal negotiations with Verizon (if it goes through their deal is slated to close early 2017.) These two tech brands, despite operating within the same industry, clearly differ in their approaches to weathering change.

Whether we do or don’t agree the pace of business actually is speeding up - change is a constant in every industry. It is indisputable that the number of factors that any business needs to deal with, and the velocity at which they appear, is greater than ever before.

By 2020, there will be more than 4 billion people connected to the internet and over 50 billion connected devices worldwide. These unimaginably large numbers are a perfect illustration of the Law of Accelerating Returns, or that the rate of technological change is accelerating exponentially. Consider mobile data consumption, which arguably wasn’t even a metric 10 years ago and is now radically impacting business models, shifting consumer behavior and enabling competitors to emerge with revolutionary solutions to problems.

Not only will tech companies need to cope with this accelerating change, but they will also need to address additional pressures on their businesses, including the persistent rumor of a valuation bubble in the industry. Chief executives—whether in public companies or venture-capital backed—are on the clock to pick up the pace and inspire ever-faster organizational change. How these leaders choose to respond to change, fuel their businesses and seize opportunities—no matter what the future holds—will be of critical importance to staying relevant and surviving the fiercely competitive marketplace.

In the case of Yahoo!, the consensus appears that CEO Marissa Mayer was simply too incremental in her approach to changing the strategic direction of the company and that her legacy is diminishing. Though growing Yahoo!’s mobile revenue, the company’s overall revenue and profit is in decline under Mayer, and its future is in question—even more so on the heels of recent revelations about cybersecurity breaches. The model of leading from a titled position, vs inspiring everyone to build the company they can be proud of, is simply outdated and ineffective.

Compare this to Jeff Bezos’s visionary, long-term and rather relentless approach to seizing change, illustrated most recently by Amazon’s big bet on opening whole new markets. After testing the brick-and-mortar retailing waters last year with its first physical bookstore in Seattle, Amazon is poised to open as many as 400 bookstores nationwide and exploring pickup locations for groceries—adapting its business to the demands of customers, while seeking new opportunities on the horizon. And breaking news today is how Amazon will check you out of your grocery store and simply bill everything to you Amazon account. No registers. No checkouts. Just the way we seem to like interacting (or not!) with people today.

As these technology giants go in radically different directions in responding to change, the takeaway could not be clearer: when adapting to change, strategic plans must be built to drive the company to get, and stay, ahead. Creating a roadmap to navigate the future should be constructed on a foundation of purpose – clarity on who they are and what they do; markets – where they play, and where they don’t play; and differentiation – how they are unique, and why they will they still be relevant six, 12 and 24 months from now.

To reinforce this assertion, BlackRock CEO Larry Fink called on corporate leaders to focus more on the longer-term strategic plan and ensure they have more than a cursory focus on their “strategic framework for long-term value creation.” It isn’t enough just to deliver quarterly results— this is about planning to scale and deliver for the future.

Successfully navigating change requires a bold strategy combined with exceptional execution – engaging and empowering leaders across the organization, delivering the results, accelerating and repeating this as the new norm for how things get done. The CEO and leadership team must be clear on strategy and foster a culture where employees are not just permitted, but encouraged, to find ways within and beyond their defined job descriptions to help the business get results faster.

Networks trump hierarchies when it comes to collaboration, speed and results.

Success will depend on the culture—led by the leadership team—attacking and breaking down hierarchy silos, incentivizing the desired behaviors and creating an environment where people are unafraid to share ideas, take risks and fail fast.

Transformations should be exciting opportunities for breakout results and new ways of working. In the end, just as market leaders, like Amazon, seize each iteration of change as an opportunity to grow bigger and better, slower adopters, like Yahoo!, may still have a chance to reinvigorate the company; redefine what they do and how they do it; invest in and innovate products that will thrill consumers; and execute and deliver results for investors.

The only question remains...are your leaders up for the challenge?

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Russell Raath is the President of Kotter Consulting, the global consulting business of Kotter International Inc., the management consulting firm founded by Dr John P Kotter, world-renowned Harvard Business School Professor of Leadership and Strategy.

At Kotter International we are focused on unlocking the full power of an organization to achieve strategic, sustainable results faster than leaders believe possible. Because we believe that more is possible.

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