Why we are so heated up about the idea of reinvention, and why we are continually forcing you to watch videos about reinvention or think stories of reinvention you can share here with us. Why do we need to talk about it today? A straightforward answer: it has all to do with the speed of change.
What does that mean? Every single company, every single person, product, a system, is destined to move through a life cycle. That life cycle takes the kind of the traditional curve we’ve all seen: we are born, we grow up, we get to the level of high performance, and if nothing changes, we go down.
We know perfectly that reinvention has been around for many many years because we know what needs to be done to don’t go down that slope. However, in human life, we do not have that option as we do lose some our capacities as we grow older.
When it comes down to business, things are different. Always, all you need to do is start a new cycle before it is too late. As we go down in performance, in sale let’s say, if our product is not as popular as before, what we need to do is start a new cycle, over and over, indefinitely.
The good news here is that we know the best companies who nail down this, and the best professionals who do this very well are indeed able to reinvent themselves again and again. They know the secret – that timing is everything, and you have to reinvent before you reach the top. That’s when you still have the resources, the budgets and when you personally still have enough energy.
Nevertheless, statistics are pretty painful. Research shows that if you start reinventing on the slope down when your performance is already on the decline, chances of ever reaching back to the top level of your historical performance is only 10%. That’s it. Which means 90% of companies which start reinvention processes when on the decline, are not able to reach back to the top.
Now, why reinvention? If we’ve known this for years, if this data, this research and “secret” has been known for years, why we are obsessed and why we are inviting you to join our craze about reinvention?
Let’s take a look back in time, the 20th century: the average cycle, from beginning to the end, from the birth to death of the company, either through bankruptcy or acquisition. From the birth of the product to the death of the product – where do we discontinue? Also about career: from the early start of career to the end of it. The average cycle for a business model was around 75 years back in the past century. That meant that we had about 37 years to the top and the same more years to the bottom.
That meant you can graduate from a college, enter the business, work in it the entire life, retire and never see one single major change in your life ever. Until the late 1980s and early 1990s when things started to change slightly.
Human life and the human economy started to immensely develop by the end of the 20th century, and we have started witnessing a significant shrinkage of this 75 years cycle. It was a technological boom, the collapse of the Berlin Wall, the fall out of the socialist countries, the opening of China, the dot-com revolution and globalization. All of these things made a difference, and we went from the 75 years average to one of about 15 years. At that point, we got only 7.5 years to get to the top of the game.
That’s not where the story ends. At current, in the 21st century, that cycle shrank even more, and today, no matter what industry, no matter the country you are based, the average round of a business cycle is seven years. For some industries such as telecommunication, the life cycle is even shorter – 12 months only. That means, if you do not reinvent yourself every 12 months, you are out of the game. Nokia is a big poster child kind of tragedy in that field.
In some industries, mining, production, forms of very stable economies, the cycle is ten years, but that’s all – ten years. That means you need to reinvent yourself every three to five years on average and that’s simply a speed we are not quite prepared for.
Our education was built to prepare us for long, predictable cycles, our systems in businesses are all about long, predictable cycles. Think of our budgeting system – they all assume you make a major decision once a year, but that’s about your budget, your “Bible”, and you live with it the entire year.
What happens today is that, by the time the year starts, maybe the budget we approved/considered in December, already in January is irrelevant. Same applies for personal life, for our careers – we used to choose THE career, THE life occupation, we would commence and make a living from through our whole lives. The vast majority of our parents worked in a single company and loved working that way.
Today we are required to reinvent ourselves more and more often, and we are just not prepared. Our world is not built to reinvent. Our world is built to last. The problem with that is that the world changed. The speed of change requires us to reinvent more often than ever before, and unfortunately, this means we need to imagine new capabilities, new skills, new processes, and we need to build our products, our careers, our companies as ready as possible to reinvent.
Reinvention must become a habit. It must become embedded in the normal way of doing business, not the be once in a forty years opportunity, but a regular part of our everyday routine. We learn to reinvent, and we come up with new reinvention direction.
Let us invite you to a challenge
As we always finish up with a question, here’s the challenge to you on this one. Take this video and show it to a colleague, a friend, your team, department, boss… somebody you think needs to thoroughly discuss this one out, who needs a good healthy discussion on reinvention.
Talk about what does this speed of change means for you, for your company, your team, department, last but not least, your career as well. Think and rethink: what do you need to do so to survive the speed of change, moreover, to also thrive in this new reality? While you have that discussion, share your comments below and share your conclusions; we would be happy to engage and discuss them further through with you!
What does it mean for your company, to live in a world, where your company must reinvent?
P.S. In case you have missed our previous featured blog+video, where we tackle the question why reinvention is not a quick fix, make sure to check it out here.