How can an executive pull a company out of active inertia?
Managers must explicitly commit to transforming their organization’s existing commitments. They must take bold actions that remake an organization’s success formula by increasing the cost, or eliminate the possibility of, persisting in the status quo. Managers might, for example, exit a legacy business, publicly commit to a new goal, or fire powerful executives who oppose the new direction. In the book, I describe several successful transformations, including IBM, Nokia, Asahi Breweries, Samsung, and Lloyds-TSB. But transforming commitments are not a panacea. They can work wonders, but they also have serious side effects. The transformation might destabilize the core business and jeopardize a predictable profit stream. They leave a company particularly vulnerable because they simultaneously set out on a risky new direction while destabilizing the core. Managers shouldn’t take these actions lightly.
