You can never assume your business is sustainable. In reality, market shifts can happen remarkably fast. Your business can become obsolete faster than you ever imagined. Just as technology and disruptive change creates opportunity, it also creates “creative destruction.” Great leaders build on trends to grow value. Poor leaders get stuck trying to “sustain” and inevitably destroy value.
GE was on the DJIA for over 100 years. Under leader Jack Welch GE followed trends, and used a 100 person Blank Space team in headquarters, to enter and grow many businesses in growth markets. “Neutron” Jack Welch dumped businesses that were not on trend to deploy resources into higher growth markets. Result was the greatest value creation of all time (through 2000.) Unfortunately Welch was replaced by Immelt, who was unable to follow trends, eliminated the Blank Space teams, and started selling off businesses to make GE easier to manage. The result was a 90%+ destruction in GE’s value during his leadership — meanwhile Apple and Amazon were on their way to trillion dollar valuations.
Leadership matters. If you focus on growth you can add enormous value to your business, employees, community, customers, investors and suppliers. If you focus on trying to retain your past business, or simplify, you can destroy all your business value and put a world of hurt on your employees, community, customers, investors and suppliers. Are you a Welch creating value, or an Immelt making excuses?
Are you constantly looking for new growth opportunities, or hoping your business will sustain itself?
Do you spend most of your time trying to defend & extend your past business?
Do you use historical data to make your investments, or do you invest based on trends and future scenarios?
Are you ready to shift toward growth at all times, or are you willing to sell off assets and growth opportunities?