We might agree with Thomas Friedman as he writes in his book “Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.”
― Thomas L. Friedman, Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations
But I have been listening to, watching and working with CEOs in middle market companies that are, quite honestly, just afraid of the fast pace of change confronting them and their businesses. What I see are CEOs literally afraid of the future. They seem unclear about what is going to “disrupt” them. All to often, they don’t even know whom to trust.
I thought I would share what I am seeing. Perhaps some of the ideas might offer lessons to learn. Careful you aren’t the proverbial “deer in the headlights” frozen by what is coming.
Mid-market companies everywhere are being slammed by disruptions
Over the past decade, I have been conducting CEO workshops for Vistage International and I am always fascinated by what I learn about the concerns and pain points of business leaders across the U.S. One thing that stands out is how much these past several months of workshops have differed from previous ones.
In the past, there were always a few CEOs who were struggling with market uncertainties, business models that needed redesigning or new products that weren't selling as well as expected. These days, however, the challenges appear to be far different.
Whether in Ohio or Kentucky or Texas or Oregon, there are many, many companies that are finding themselves up against a growth wall. Here are a few examples:
• One CEO in the oil and gas industry is watching his competitors get bought out, which in turn was limiting his ability to compete with these now-much-larger companies. Even his clients were worried about this ability to serve their needs in new ways.
• Another CEO, a businesswoman, is watching an entirely new model for real estate brokerage invade her market, completely changing the game. This novel way of doing business was not interested in building relationships with home sellers. Instead, it is focused on capturing leads off the internet and then searching for the right home to fit potential buyers. While this CEO herself was not interested in following this path, those who are rethinking the value curve are doing really well, really fast in her own market space. Keeping to her traditional business model was not going to be easy.
• Then there was the recurring issue for companies in all types of industries that cannot find people to work. It is both a motivation problem and a lack of skills. The talent gap was ubiquitous. It did not matter if they needed truck drivers for cement trucks or skilled construction workers to build bridges, or even design experts for fashion industry companies.
• Finally, a service industry company is concerned that its long history of excellence was possibly going to be eroded by technological solutions that might replace the services it offers. They have to quickly reinvent themselves to stay viable in the coming new world while still catering to clients who are not concerned about what comes next.
This is a tsunami overwhelming middle-market and larger companies, family firms, regional players and even entrepreneurs.
Searching for common ways forward, regardless of industry
In the workshops, some very important realizations have begun to come through as I’ve helped these leaders rethink their strategies so they could rapidly adapt to fast changing times. Hopefully their solutions can be of help to you and a similar business change management situation you might be facing.
I’ve written about these same trends in a Huff Post blog (“Major Trends You Better Tackle To “Make America Great Again”!) which you might want to take a look at.
Labor Shortage is at a crisis point. First, all of these CEOs, regardless of size or industry—from bridge construction to trucking, development to cyber-security—were struggling with the shortage of trained labor. They all were experiencing the pain of the 5.5 million open jobs in the U.S. that remain unfilled, 1 million of these in IT or related areas. They could complain or begin to find ways to address the issues. Most were just complaining.
Robots. The CEOs had some understanding of the increasing presence of robots in the future but had no idea how ubiquitous robots already are today. Almost unanimously, they at first discounted the idea that robots might be able to address their labor shortage problem. Once the idea became an actual possibility, however, several of them pounced on the idea of rethinking the value of robots and robotics for their companies.
Machine learning and artificial intelligence. These leaders were far more concerned with day-to-day operations than with how artificial intelligence might impact their business. Most of the ones I have been working with over the past year are too far removed from the innovations coming out of Silicon Valley and everywhere else to realize the implications (and they’re not googling to learn about it, either).
Fewer stores, higher prices. Another company was facing a serious problem due to the closing of its retail distribution outlets, leaving it with shrinking market presence and almost insurmountable pricing challenges brought on by Amazon. The CEO’s solutions, and those of the team working with him, focused on building a community of fans and giving their products more value than just functional utility.
Consolidations. A steel fabricator attending one of my workshops was crying about the acquisition of his competitors by larger companies, leaving him unable to compete. And his clients, as loyal as they had been, were now being sold or were now under new, younger management who had their own ideas about how to do business.
What is becoming increasingly apparent is that unless companies are in a crisis, they are not going to see the crisis that is coming. And they are not going to tackle it before it disrupts them.
Indeed, this is a time for real creativity and innovation. The speed of change is accelerating, faster than people can deal with it. From the perspective of an anthropologist and a bit of Darwinian thinking, it is not the smartest or the strongest that will survive, but the most adaptive.