“Success is a lousy teacher,” says Bill Gates, “It seduces smart people into thinking they can’t lose.”
Economic downturns aside, it is the companies that become too comfortable with their own performance that have just as much to fear. “Even the most dynamic of organisations can turn complacent,” says leadership performance expert John P. Kotter, “(they think) What they are doing is right, that there is no need to change, regardless of what’s happening outside.”
So what’s the antidote to damaging complacency?
Entrepreneurs and MDs of a certain age may remember what happened to the American semiconductor market in the 1970s. Funded by venture capitalists, supported by the Government – and backed by the research might of various academic institutions, the US were world leaders in the field and ‘outsold their Japanese rivals (their nearest competitor) more than two-to-one through the early 1970s.’
However, just a decade later the picture was quite different and by the end of the 1980s, US merchant suppliers’ revenues had dwindled to two-thirds of the Japanese level. And the reason for such a massive turnaround? Lack of investment bought about by complacency.
Investing while winning
As noted business analyst Pankaj Ghemawat wrote of the episode, “all the data suggested that in the aftermath of the 1974-1975 recession, US competitors in semiconductors took their collective foot off the investment pedal while Japanese competitors didn’t.” So is consistency in long-term investment and planning the only antidote to becoming complacent with your success?
Protect your client base
The other lesson learnt by our example is that if you don’t look after your clients, someone else will.
To keep clients happy even when your business is soaring, you need to protect your client base and stay ahead of your competitors by establishing a focused approach to managing important sales accounts, including creating effective touch points. It’s true that the simple act of following up with your customers can help them feel valued, but to do this effectively your staff must also feel happy, be well looked after and well trained.
You must also never stop telling customers your story. If it holds that you shouldn’t stop advertising in a recession, you also shouldn’t stop advertising at the height of your success.
Stay ahead of the game
So in the final analysis, in order to avoid self-satisfaction destroying your business, you should always try hard to see the big picture and go further than your competitors to stay ahead of the game.
As award winning business expert John Spence identifies, there are many things your organisation can do to stop getting complacent, but in the end it comes down to avoiding the 4 Is of ‘ignorance, indifference, inflexibility and inconsistency’.
Constantly staying abreast of market changes, keeping up with your advertising, training and investment, and maintaining a perpetual discourse with your clients should mean even the most successful companies continue to offer true value and never get their wings clipped.