Introduction
Most managers would agree that change has been their central
preoccupation as far back as they can remember, and that managing change is the
raisan d'etre of management.
But since the late 1990s a new kind of turbulence has
increasingly made itself felt.
Unlike the earlier changes, which arose out of uncertainties in one's own
traditional business, the new turbulence came from unaccustomed and unfamiliar
sources; from foreign technologies, from foreign competitors, from governments.
An increasing number of such changes posed major threats or
opportunities of the firm's technology, major loss of market share, drastic
increase in the cost of doing business, a chance to get a major jump on
competitors, or a ground floor entry into a new industry.
The speed with which such threats/opportunities develop has
been increasing to a point where the structured processes, which we have been
discussing up to now, may no longer be capable of perceiving and responding to
them fast enough, before the threat has made a major impact on the firm, or the
opportunity has been missed.
Now, we turn our attention to such unfamiliar, momentous and
fast changes. The concern of this
chapter is to focus on different ways in which firms respond to such changes.
If, for whatever reasons, the firm fails to respond to a
threat that has manifested itself, the losses caused by it will continue to
accumulate. Sooner or later, most
firms will take countermeasures. If
the lost sales are irreplaceable, the solution is to stop the product line and
to eliminate costs, which no longer generate income. If more positive options are available, the solution is to
develop new products which will use capacities and capabilities made idle by the
threat. A more difficult response
is to divest from the obsolete part of the operation while, at the same time,
replacing the lost profit with totally new activities. The preferable alternative, though not
always available, is to convert the threat into an opportunity: to devise a
response, which not only replaces but enhances profits and sales. Thus a firm with foresight, which
anticipates the shift to new energy sources, can change to the new sources ahead
of competitors and increase its market share at their expense.