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Want to thrive in the business environment of the future? Shift your strategic mindset from growth to evolution

The belief that a business is ‘either growing or dying’[1] has been entrenched in our strategic mindset since the mid-twentieth century. However, in today’s ever-more-dynamic business environment, organisations that are focused on adapting to change are the ones that thrive. These businesses believe that you’re ‘either evolving or risking extinction’.


Growth is the antidote to stagnation

This growth mindset is founded on the premise that a business is a large machine – a factory – that produces ‘products’ for its customers to consume. The goal of that business machine is to find as many customers as possible to buy what they sell and get them to pay as much as the market will allow. This machine can’t stay static lest it be overtaken by the other machines that do the same thing.

What constitutes the ‘factory’ has changed over time from being a literal factory at the turn of the 20th century to just about any business environment at the start of the 21st century. The notion of ‘products’ has similarly broadened from physical products to include virtual products and services. However, the strategic approach of any business looking to fight off stagnation has remained largely unchanged – growth. Growth either in the number of customers that are served or the number of products that are sold. The machine either gets bigger or it gets faster – best of all, it gets bigger AND faster! Staying ahead of the competition means expanding into more markets, creating a bigger market share, adding more features or making the factory spit our more products for roughly the same input.

What the hell’s wrong with growing?

Nothing … on the surface. It’s the assumptions that underpin this strategic mindset that are at odds with today’s highly-dynamic business landscape.

  • Do what you’ve always done. The traditional strategic approach is built on the notion of doing what you’ve always done. You just make it bigger or do it more productively to create a sustainable, thriving enterprise. However, the customer relationship is changing. They now make buying decisions based on what fulfils their needs and wants rather than buying what you need to sell them. There are too many companies that are solving their problems or fulfilling their desires in an ever-growing number of ways to believe they will remain satisfied with buying what they’ve always bought.
  • High-level management and strategy-making are the same thing. Because most of what goes into a strategic plan is based on analysis of the current or, more likely, the historical operational environment, leaders often confuse future-focused strategic development with high-level operational management – most often, this is expressed as financial management. Unfortunately, deciding how much you need to sell or the investment you’re willing to make to grow your market share doesn’t adequately address what’s required to attract and retain your customers.
  • Your competition are the people that do what you do. A growth strategic mindset is predicated on trying to outmanoeuvre or squeeze out the competitor that you know – the other businesses that do the same things you do. More and more in today’s business environment, your real competition is change. It’s either the change generated by the shifting business landscape or a lack of change due to your would-be customers’ apathy or reluctance to move away from the status quo.

The race for the bottom

The fundamental problem with these underlying assumptions is they’re a manifesto for letting your history define your ‘now’ rather than using now to help determine what’s ‘next’.

At some point in every growth-based strategy the number of new customers that want to buy what you make will decline. At the same time, the number of businesses that make what you make will increase – competing for this same customer base. With increasing speed and frequency in today’s business world, new entrants will begin to serve these same customers in a different way or changing economic fortunes will reduce the investment they’re willing to make in your product or service.

This can quickly mean that market forces determine that ‘best’ in your market is equally distributed and your product or services is differentiated based purely on price. A commoditised market is a competition that few businesses win in the long-term.

This inevitable declining growth creates a need for a reactionary response to the adverse business impacts. A new ‘strategy’ is put in place to repair the damage done to your current business fortunes – a strategy to fix the historical impacts on your ‘now’.

How do I create an evolving business?

Today’s most effective strategy-making is not defeating stagnation with growth, but by doing the future-focused work that prepares and adapts your business for the change that is coming. It requires that you invest now in what’s next – the market shifts, the changing customer needs and the improvement opportunities.

In this strategic mindset, the business is more akin to a complex biological organism than a large machine. The adaptation necessary to drive evolution is based on input and activity at the edge of the organisation – where value gets created and exchanged with your customers. That’s because the interdependencies and interactions are understood far better by the people within the business than by the brain that supposedly controls it.

This evolutionary strategic mindset, requires that you bring the business and your people together to leverage the bandwidth, knowledge and capabilities of the entire organisation. It means constantly and consciously turning strategic foresight into adaptive activity. By involving the people most familiar with the business’s inner-workings in improving the busines, you get far better solutions and create broad-based ownership around the change you hope to make. Harnessing the knowledge and experience of the people that are on the ‘front lines’ of business operations or customer interaction, allows you to tap into valuable intelligence that shapes strategic direction.

When you do this, you:

  • Engage and motivate people by giving them something to be engaged in and a meaningful purpose to be motivated by.
  • Attract and retain customers by genuinely caring about their constantly shifting and increasingly demanding wants and needs.
  • Create a future that the business is eager to evolve into.

Adapt to drive your own evolution

Businesses evolve – they respond to the changing environment whether you want them to or not.

To evolve in an intentional way – toward the future that you aspire to – you need to actively adapt your business in a consistent and persistent manner. This means creating a rhythm where your people are constantly doing meaningful, future-focused work that helps to shape the business. This means creating a leadership imperative to give them the trust, support and resources to do their work well. The progress they make in doing this purposeful work will generate motivation that will in turn make them want to do more and build the skills necessary to do it better. This creates an upward spiral of adaptation that is increasingly more creative, productive and collaborative.

It is here where the evolutionary business thrives. Where growth doesn’t mean bigger for bigger’s sake. It means learning to be the best version of the future you hope to create.

I’d love to hear your thoughts on creating an evolving business  – please leave a comment. Never miss a post – sign up for my newsletter.

[1] As an aside, I have no problem with this as a personal development refrain as espoused by Steve Siebold and others. However, here the connotation of ‘growth’ is much different – it is rarely (or never) intended as direction to get larger! Growth is defined in terms of learning and development – in other words, ‘evolving’ as a person.

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