You Must Reinvent Every 3 Years

by Nadya Zhexembayeva on 20th May, 2015 at 3:12 PM CEST

Once upon a time, our companies enjoyed long and healthy lives, with a slow rise to the top of financial performance and a gradual decline to annihilation. The rate of change was so slow that reinvention was rarely needed—and when it was, we had all the time in the world to renewour business on our term. But the fairy tale is long gone.

As Steve Denning of Forbes puts it: “Fifty years ago, ‘milking the cash cow’ could go on for many decades. What’s different today is that globalization and the shift in power in the marketplace from buyer to seller is dramatically shortening the life expectancy of firms that are merely milking their cash cows. Half a century ago, the life expectancy of a firm in the Fortune 500 was around 75 years. Now it’s less than 15 years and declining even further.”

Denning’s claims are supported by research conducted by the Deloitte Center for the Edge in 2001, which showcased how corporate life cycles were diminishing rapidly. Yet, much has happened since 2001. The increasing level of globalization, showcased so painfully during 2008-2009 global economic crisis, powered by the ever-increasing access to knowledge (think Google, free online courses and MOOCs, Khan Academy, etc), means that more of us are inventing every day and sharing those inventions globally, than ever before. There is more start up activity today than ever before, but they also continue to die at a high rate: only one-third survives to the 10-year mark.

With all these pressures, the demand for corporate (economic, communal, and personal) reinvention has grown even further. Today, the life cycle of the company is much closer to 5-7 years than it is to 15 years.

Does it mean that we are all doomed? Absolutely not. What separates companies that survive from those that go down is the ability to start a new lifecycle, to pivot their company far enough from the path of destruction to find a new opportunity for growth. But if before you had 30+ years to reach the prime, today you might only have 3 years. That means that barely 2-3 years into your existing business reality, you must start the reinvention cycle anew.

Shocking, isn’t it? Kodak and Nokia thought so, too. Kodak had been the staple of American culture throughout 20th century, selling at one point 90% of all photographic film and 85% of all cameras in the United States. Nokia had been the number one cell phone seller from 1998 to 2007, controlling at its prime 40% of the entire global handset market. Yet, Kodak filed for bankruptcy in 2012, while Nokia was forced to sell it telecom business to Microsoft in 2013 to save itself from its own bankruptcy.

The business you are in today cannot be the business you’ll to be in 3 years from now. By then, you are either entering your new business or you are on the way to extinction. Period.

Reinvention … requires persistence and complete dedication. No one can do this heavy lifting alone, especially the increasingly busy CEO. So, it is time to enrich the C-Suite with a new executive position: the Chief Reinvention Officer.

Author: Nadya Zhexembayeva
"Built to Reinvent - The Ten Commandments of Today's Sustainable Company"

Read commandment #1 HERE

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reena kataria

reena kataria

Wow, really nice article
Loved the position ' the chief reinvention officer'

The world is changing rapidly and we have to cope up with it with its own pace and in today's era we are very much occupied with the work that we can't handle things perfectly in all the area and in such cases if anyone is helping us it would be great for the person and for the company as a whole.

Here in India we have one philosophical way to deal with it that is "Vipassana" that means we need to see our own things and behaviour as a third person and that can help you reinvent yourself which is really good for personal growth :)

3rd June, 2015 @ 9:27 AM CEST

Hitesh Thakkar

Hitesh Thakkar

good one.

7th June, 2015 @ 6:37 AM CEST

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