Complacency is self-satisfaction. It is the result of a successful track record that spurs confidence. When a business is complacent, they are exposed to the following dangers:
Settle into a rut of out-dated practice—People become very good at doing the same routine the same old way. They continue to follow the practice even though the business might have outgrown it.
Lack of interest in trying something different—Past success provides the ‘proof’ that status quo is fine. The thinking is that why bother rocking the boat as there is no guarantee that the new way would bring the same level of success.
Under-estimate the impact of change—The belief that the business is immune from the dynamic changes creates a blind-eye to deteriorating competitiveness. The business ends up falling behind quickly.
Regardless of the type of business and the competitiveness of the industry, a complacent company sets itself on a downward spiral for failure. To avoid complacency, a business needs to have:
A radar for tracking changes—The fast pace of change makes it challenging to keep up with what is happening in the marketplace, but the lack of such knowledge could be fatal.
A voice of reckoning—This is about self-assessment to gauge what action a business needs to take in order to thrive. There is no substitute for taking an impartial and objective view of where the business stands and how it could sustain success.
A receptive mindset to improve—Managing a successful business is like farming. When the weather pattern changes, the farmer has to adjust the irrigation so as to maintain a healthy crop. He also needs to take appropriate action to improve the crop year over year. The same logic applies to business.
The recent emergence of Kodak from Chapter 11 is a good example of how a leading, pioneer company lost its luster. Despite its invention of the core technology for digital photography, Kodak was hesitant to push the technology, partly in fear of cannibalizing its film business. Well, competition moved in and new technologies such as smartphones replaced the need for cameras. Kodak was living in its shadow for too long. When it woke up, the world has changed. It would be interesting to see how the company fares with the latest strategy. Success definitely worths celebration but it is a risky proposition to become complacent.
© Connie Siu 2013. All rights reserved.