What kind of mindset is needed to deal with changes that can impact the product portfolio?

To find the context of this blog, please do read this one I published recently. To summarize, this is a part of knowledge sharing of my panel talk at GHCI. Just as a note of caution, please do not expect the below answers to be elaborate as these were conveyed in a time limit of 3-4 minutes. I have tried to recollect these to the best of my knowledge.

For many companies, portfolio planning is an annual affair. In this mobile-first, cloud-first world, how can organizations keep up with the pace of change.

I love Sports and I will be a bit biased towards sports related examples. I would like to narrate an example from the sport of Cricket-

There was an England bowler named Monty Panesar, who was bowling in one of the Ashes tests (Ashes is one of the most traditional cricket series between England and Australia). Commentating in the match and seeing Monty bowl, Australian legend Shane Warne is said to have remarked-

“Is Monty bowling in his 33rd test or the 1st test for the 33rd time?”

Monty probably stopped growing and probably he started to think of himself as having been an accomplished bowler after getting a break into England playing team and stopped growing there afterwards. Monty probably did all the hard-work to reach the pinnacle of his profession but sadly, after reaching there, kept doing the same things that brought him to the top and didn’t innovate further. 

For the purposes of our discussion, let’s call this phenomenon as “Monty Effect” i.e. doing all the hard-work to achieve initial grand  success, only to not being able to sustain the same over longer time. Interestingly I have seen a lot of companies go through “Monty Effect”. Companies cash-in well on what made them successful and eventually the very reason that made them successful slow starts to become the reason for their downfall. They keep doing the same things that made them successful in the past, only to realize later that the incrementalism has really pushed them down. The key fact remains- things that make companies (and careers too) reach success at one level doesn’t work well while reaching a different level. A related corollary is echoed by Robin Sharma also famously quotes- “Don’t live the same year 75 times and call it life”

On the topic of managing change, while dealing with the product portfolios- I would like to say just 2 points here-

Point#1. Anticipating change and adapting to it is a skill…

…and if we don't treat it as a skill we leave a gap open to become victims of change.

From a popular case related to AOL-Time Warner merger- AOL was the king of the dial-up Internet world, but that world was rapidly being supplanted by always-on, much faster broadband. At the time of the merger, half the country had Internet access, yes, but only 3% had broadband. AOL’s business model couldn't anticipate the threat related to broadband on time. 

Denial takes different forms. In 1984, the then head of Digital Equipment Corporation, the largest mini-computer maker at the time,  described PCs as "cheap, short-lived and not-very-accurate machines." This attitude was especially ironic when you consider Digital's past. Digital broke into the world of computers, then dominated by mainframes, in the 1960s with simply designed and inexpensive mini-computers, and grew to become very large company with that strategy. Yet when they were faced with a new technological change in their environment, Digital- once the revolutionary that attached the mainframe world- now resisted this change along with incumbents of the mainframe era."

In my career time, I have seen some legendary companies like Sun Microsystems, Compaq, etc. either merge with bigger companies or bite the dust altogether.

Companies need to build in mechanisms that can help them sniff the changes and help them respond to it timely.

Point#2: As much as we try, it's not possible to anticipate change every time

The second point that I mention here is in a way contradicting with the point I just said and it is that- As much as we try and want, it's not possible to anticipate and predict the change every time accurately. And when we cannot predict it, we should do the next best thing- respond to the situation like the best in the world.

The companies that survived the aftermath of 9/11 attacks weren't experts in dealing with such situations. But they were the companies that were most responsive to change, they were the ones who were willing to work on the ground, they were the ones who changed their plans by every hour and do all that was need to get back on feet despite numerous odds. Southwest airlines was one example which survived post 9/11 situation when most airlines just couldn't cope up with the gravity of the situation.

What happened after 2007 to Nokia is also widely known and written about. Though operationally, it had the best brains to take them past the fire-like situations with suppliers but strategically, it probably lacked the anticipation machinery that could help them assess the impact of disruption iPhone and Android were about to cause. Another aspect in this case is that Nokia failed to part ways with Symbian OS when Android seem to be becoming a de-facto standard.

Walter Gretzky, the father of Champion Ice Hockey player- Wayne Gretzky gave his son the advice to "skate where the puck's going, not where it's been". Likewise, the companies need to evolve and position their products and offerings consistently towards the direction where the industry and markets are moving, not where it’s been in the past.

When the Australian team was winning almost everything in the Cricket field from mid-90s through most of 2000s, their captain during the initial stages of its transformation Steve Waugh shared a secret of their success. I remember him once saying that internally the Australian team used to consider themselves as world no. 2 (though they were undisputed #1). This feel of them not being #1, even though artificial one but deeply internalized one, helped them get better even when they won. If they won by 10 runs, they did make sure to celebrate but more than that set themselves the goal to do win by a bigger margin in the next match. So this team remained emerging and constantly strived towards reaching great heights.

Companies need to imbibe this mindset when their products are doing well to help them prepare for the unforeseen change.