Selling Disruptive Change: Expect Resistance
NEW YORK (TheStreet) -- In many industries a handful of companies account for most of the industry market share. For these companies, maintaining share means growing with the industry. But most industries do not grow fast enough to satisfy shareholders. In order to grow faster than the industry, high share companies must continually change their business models. Pushing harder on the same model is rarely sufficient to meet growth expectations.
Think of Apple. For decades it was a low-growth PC maker with a solid market share. Apple's recent growth came from a new business model that included: smart phones, iTunes and retail stores. But it took a new CEO to drive that change. Or Disney, a successful but low growth theme park company that changed its business model to include: resorts, cruise ships, and consulting services. Again, credit must go to Michael Eisner, the CEO who changed the model.
Why are big changes so difficult?
In 2005, the Nobel Prize for Medicine was awarded to Barry Marshall, an Australian physician. In 1984, Dr. Marshall found that ulcers were not caused by excess stomach acid from stress; ulcers were caused by bacteria. His work was rejected by academic journals and scientific colleagues again and again. He wrote, "When the work was presented, my results were disputed and disbelieved, not on the basis of science, but because they simply could not be true."In frustration, Dr. Marshall drank the bacteria himself and within three days he had an ulcer. But it was not until 1994, a decade later, that the community officially accepted his conclusion. Recall that Dr. Marshall stated that his scientist colleagues rejected his work, "... not on the basis of science, but because they simply could not be true." Did these scientists use their extraordinary analytical capabilities to assess his claims, or did they use their emotions? Daniel Kahneman, a Nobel Prize winning psychologist, found that we all make quick decisions based on what we perceive as familiar. Our initial decisions are almost always emotional. Once we make our decision, we look for evidence to support it. Thus, we quickly accept ideas that fit our current view of reality and reject those that don't. Let's move this theory into the world of work. A project team decides to reinvent leadership development. They change the development strategy from management training classes to on-the-job coaching through structured monthly business reviews. Yet, the executive decision maker cannot accept this new approach despite successful pilot projects and years of complaints that training classes don't improve leadership. Just like the disbelieving scientists, corporate executives are also emotional human beings. And all too often, their emotions kill great ideas.
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