Not many years ago most people spent their entire working lives with a single firm. Anyone who held more than one or two jobs over his or her career seemed just a bit odd. Companies, businesses and products appeared immortal. If you made machine tools, furniture, fabric, fasteners or most anything else, you always would. The world was a pretty static place and you could depend on markets, companies and careers to be around for a long time.
But it only seemed that way because people saw the world in the short term. Businesses, markets, and people’s lives and careers were, are, and always will be extremely dynamic. That which is solid and dependable today could be very different in the future, and that future may be only days away!
- The U.S. machine tool industry that flourished for nearly 100 years is almost defunct.
- Most furniture is made offshore and that “shore” changes constantly.
- Virtually all fasteners and fabrics are produced elsewhere.
- Many consumer goods are manufactured in China with quality at least equal to the stuff made here and at a fraction of the price.
- Most computer code is written in India.
- The 5-inch floppy became the 3.5-inch nonfloppy, which became the CD, DVD, and will soon be something else.
We yearn for the good old days but, unfortunately, the good old days never really existed. Before all manufacturing was going to China it was going to Mexico, and before that it was going to Eastern Europe and probably someplace else before that. Companies that seemed to be immortal were actually founded in the early 1900s, floundering in the 1950s and crashing in the 1980s and 1990s.
Not all that long ago, the CEO of IBM thought the world could use maybe five or six computers, then it was millions, and now it’s getting tough to sell computers, too. The dynamics have always been there, we just didn’t notice them. We focused on our markets, technology and careers, and ignored the fact that all the drivers behind the markets, technologies and careers were changing!
Clearly, companies and individuals have to reinvent themselves as the world evolves to stand any chance at long-term success. But because most of us are Luddites and lazy to some degree, reinvention isn’t all that easy. There are some caveats involved as well.
- It’s a lot easier to reinvent GE than Action Tool or Rockford Products. All Jack Welch had to do was spin off chunks of GE and add new ones to stay current and look like a genius. It’s a lot tougher when you’re working with a house full of stamping presses or headers. What do you “reinvent” when stamping goes away or heading goes offshore?
- It is easy to say, “We’ve arrived,” and declare immortality even as a conglomerate, so Jack should get some credit for taking on the discomfort and risk of reinvention. There are those that didn’t: What ever happened to International Harvester?
- Reinvention is often constrained by the entrenched bureaucracy that operates the conglomerate. The divisions want to continue being entities, doing what they’re doing, and with the prestige and power associated with their autonomy. It takes a tough CEO to fight through that limitation, and again, Welch deserves credit for wrestling a bureaucratic monster and winning.
- The reinvention could be wrong! Dumping buggy whips and adding floppy disks probably isn’t going to solve many cash flow problems, even if it sounds like a great leap forward.
All of this applies to people as well as businesses. Individuals have to continuously look at reinventing themselves as managers and technicians. The alternative to recognizing evolution and adapting to change is pretty ugly!