Written by Cheryl Flink, Ph.D.
The business has thrived and enjoys a market leadership position. The brand has cachet and customers rave about the product. The operating model has created efficiencies that yields good margins. Employees seem engaged and happy. And yet, signals have emerged that make you uneasy. Some new players have started entering the niche you dominate, and you recently lost a small(ish) customer to them. The R&D team has been focusing on evolving the product with new features and functions and improving performance, but innovation seems to have slowed. In quarterly meetings, stakeholders have started asking the question “What’s next?” It’s time to disrupt the business—or be disrupted.
Companies can take years to become a market leader, and it can be painful to think about disrupting that hard work. But no business can march in place. The CEO must help the business pivot to create the flexibility to innovate. Indeed, the wheels must keep turning to ensure business continuity. However, startups and competitors will be actively inventing rival solutions and angling for your customer base. Customers will defect when better solutions exist.
The business must fund innovation and adapt the business to retain or regain industry dominance. This shift towards agility once again creates new challenges—and the CEO must lead differently.
The four leadership challenges of the established phase
The four leadership challenges of this phase focus on the central theme of letting go of some of the very processes and control gates the executive team put in place to scale the business. How can the business pivot towards being responsive without losing the efficiencies of a standardized operating model?
Focus on agility
The rate of business change continues to accelerate, and all leaders and companies must become more responsive and agile (Accenture, 2024). CEO’s must deliberately embed an agile mindset in corporate culture lest the company become obsolete (like Kodak, Blockbuster, Bed Bath & Beyond, and Borders). Leaders can meet this challenge by establishing listening posts that signal market changes and provides fresh perspectives. These listening posts—including customers, competitors, market trends, and socioeconomic signals—can inform a responsive innovation agenda. The CEO and executive team must embrace change and move from “this is the way we do things around here” to “what might we do differently?”
Decentralize decision making
The CEO and executive team set strategy—and are ultimately held accountable for results. The pressure by investors and/or shareholders to show accelerated growth can make it hard to give up control. But to be agile, to re-imagine the business, to change the status quo, teams must be empowered to make decisions. Leaders can clarify what decisions teams have the authority to make, allow them to make those decisions, and support the decisions. Although decentralized decision making can leave the senior team feeling vulnerable, removing bureaucracy and red tape is critical to agility. The CEO and executive team must move from top-down decision making to distributed team decision making.
Manage polarities
Polarities can create an “us vs. them” mentality in teams and shows up fairly dramatically when an organization begins shifting towards agility (Flink, 2023). Teams working on current platforms and incented to ensure business continuity have a keen eye on risk management, process efficiency, and customer retention. Teams focused on innovation are driving toward revenue from new product solutions, speed to market, and both customer acquisition and customer retention. These goals and orientations can put teams in conflict when both are really working towards customer centricity. They are working both to keep market share and expand market share. The CEO and executive team will need to help the organization move from an “either-or” mentality to a “both-and” mentality.
Break things
The status quo works. There is pride in that work, and rightly so. It may be painful to think about making big changes to platform investments, the organizational structure, and even the corporate culture. But it’s time to experiment and break things so that change is done by you instead of to you. The CEO and executive team must move from saying, “if it ain’t broke, don’t fix it” to asking, “what are the consequences of doing nothing?”
