Leaders don’t question the viability of their business model often enough – and they could be caught unaware by the massive disruptions technology is causing to their industry.
That’s the finding of a study to be published later this month by the Australian Institute of Management.
The study, which asked 1,700 executives and business professionals about the hot-button leadership issues stressing them out, found most businesses haven’t revisited their business structure or model since before the global financial crisis, says AIM chief executive Carmel Ackerly.
“We all know the patterns of recent times – we can’t rely on the patterns of old. The same goes for business structure,” she told LeadingCompany.
“You can’t just accept the way you’ve structured… you need to constantly be challenging your business model.”
There are a number of reasons why businesses fail to regularly review how they’re set up.
Complacency creeps in when people keep doing things the same way, Ackerly says.
“You’ve got your meetings; you’ve got your staff working away.
“It’s very comfortable in head office behind your desk. But you can’t have a strategic view of the company if you’re very comfortable.”
Another issue is that staff members often don’t welcome change. This can lead to reluctance to uproot their established patterns and protocols.
“If you start questioning how staff do their jobs, and how they work, people start to feel threatened. But what you’re actually trying to do is be flexible and responsive to the labour market. If you do that successfully, you’re more likely to hire people than lay them off.”
Ackerly says that if leaders do decide to restructure their business, it’s important to adopt a consultative strategy.
It’s also important to sell the idea.
At the end of the day, Ackerly says, it’s all about the customers. Leaders should focus on them and work backwards.
“It’s always about relevance – understand what customers buy, and where they buy it, and then look back, and think, ‘what do I need to change to better serve them?’”
This is the final part in LeadingCompany’s six-part series on the hot-button issues facing leaders in 2013. The other parts are:
- Part 1: We don’t want to be leaders (but we do want to follow)
- Part 2: Leading innovation – how to tap a wellspring of ideas
- Part 3: The chaos and the fear – harnessing the negatives to lead change
- Part 4: How leaders come to rely too heavily on one person
- Part 5: How a fear of risk is killing workplace culture
The AIM survey, which this series was based on, will be available later this month.