Copyright © Michael McQueen 2013
First published in 2013 by The Nexgen Group Pty Ltd
www.michaelmcqueen.net
ISBN: 978-0-646-90134-3
ISBN: 9781626755741
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Intro – Welcome to the Inflection Point – a sign of the times.
SECTION 1: The Cycle of Relevance
Chapter 1 – The Relevance Curve
Chapter 2 – Real-life Relevance
Chapter 3 - What is your Silent Pulse?
Chapter 4 – Irrelevance: Fate or failure?
SECTION 2: The 5 Roads to Irrelevance
Chapter 5 - Shift Happens
Chapter 6 – The Intoxication of Success
Chapter 7 – Preservation Obsession
Chapter 8 – Progress Addiction
Chapter 9 – The Human Factor
SECTION 3: Winning the Battle for Relevance
Chapter 10 – Re-Calibrate
Chapter 11 – Re-Focus
Chapter 12 – Re-Fresh
Chapter 13 – Re-Engineer
Chapter 14 – Re-Frame
Chapter 15 – Re-Position
Conclusion
On a recent speaking tour, I stopped in a small rural town to grab a bite to eat. As I strolled down the main street looking for anything that might be open, I stumbled across an enormous real estate sign that stopped me in my tracks. What caught my attention was the property being sold.
It was clear the beautiful old church had seen better days. Timber boards covered windows where stained glass once glistened; a trail of stairs leading to the church’s giant front doors was overrun with weeds; birds nestled in a broken ceiling on the front porch.
On a side wall of the building a marble plaque with faded gold-leaf inscription read simply, “This stone was laid by President of the Baptist Union, 20th June 1903. Dedicated to the Glory of God.”
As I continued down the street, I imagined the many significant moments and memories that had taken place within the walls of the once busy church. I envisaged a small group of committed individuals determined to create something sacred and beautiful, and I imagined the sacrifices they would have made to see their dream fulfilled.
Hosting baptisms, weddings and funerals, the building would have once been central to the life pulse of the town.
And then I wondered: what happened?
At what point did this church cease being core to the rhythms and cycles of this town’s residents… and why? Was it a change in the community’s values or DNA? Was there a clergy leadership scandal that caused the church’s membership to scatter? Did the local economy fall on hard times? Had the congregation aged and eventually died out?
Whatever the cause, the result was clear. Somewhere along the line, this little church had failed to keep pace with the world around it – a predicament in which they are far from alone.
All around the globe, many similar enterprises are struggling to remain relevant to their respective ‘communities’. Non-profit groups, religious organizations and entire political systems are grappling with shifting social values. Institutions of all shapes and sizes are trying to figure out what the new ‘normal’ looks like – and if there even is one.
In the commercial realm too, recent years have seen scores of iconic businesses and brands fall by the wayside, morphing from revolutionary to relic in the space of a few decades.
What, for example, has happened to Kodak? Nortel? SAAB? Ames, Blockbuster or Borders?
As traditional profit models and distribution channels are disrupted or destroyed, corporations, industries and brands are trying to keep pace and remain viable. When one considers the sectors currently under siege, from traditional retailers to postal services and newspaper printers, it is clear that no industry is immune to extinction.
Having dedicated almost a decade to tracking the dominant trends shaping business and society, there is no doubt in my mind that we are at a pivotal point in history. We are experiencing an unprecedented convergence of economic, social, technological and geopolitical shifts that are widespread, rapid and fundamental.
In short, we are at an inflection point in the history of mankind - a point at which the future cannot be discerned by looking to the past.
Recognizing these shifts in the social landscape, my research in recent years has become focused on three key questions:
These three questions have largely informed the structure of this book. In section one, we will examine a cycle of rise and fall evident in every arena of human endeavor.
In section two, we will explore the five roads to irrelevance – the five common reasons why even the greatest become obsolete – and how these offer signposts for us all.
In the third and final section we will look at a series of habits and strategies that have enabled the enduringly relevant to stay ahead of the curve for years or decades at the time.
So get set. Think of this book as a boot camp of sorts – a preparation for the battle we must all fight in the years ahead: the battle for relevance.
SECTION 1
Like most things in business and life, relevance follows an incredibly predictable cycle or pattern – one which can be best depicted by a model I call the Relevance Curve.
Similar to a lifecycle graph, the Relevance Curve tracks the four sequential phases that products, ideas and organizations naturally go through over time in their journey from emergence to prominence and finally obsolescence.
For simplicity of discussion, in the pages that follow I will use the word ‘entity’ as an interchangeable term for any product, business, brand, idea, organization, institution or movement. Although the emphasis here will be on organizational relevance, many of the same principles and patterns in the pages ahead apply to individuals too.
Phase 1: Emergence
Every entity begins the same way - with a point of creation or conception. Perhaps it’s a spark of inspiration, an idea scribbled on a napkin over coffee, a moment of brilliance that wakes you from a deep sleep, or a meeting of minds during a brainstorming session. The seeds of the idea take root and before you know it, a new business opens its doors, a new product hits the market, a new movement or association gets underway.
In this early stage, your relevance is typically quite low. After all, before you can be relevant to a target audience you must first determine who ‘they’ are and why they should pay attention to you in the first place.
Phase One of the Relevance Curve is a time of exploration, experimentation and creativity. Often a small team of like-minded individuals rally round the new vision with a shared commitment and sense of anticipation.
Budgets are low, stakes are high and the smallest victory is cause for celebration. This is the “fake it till you make it” stage of any fledgling endeavor – and typically it is an enormously exciting and simultaneously challenging time.
During this first phase, business models, target markets and an entire product’s design can change from week to week or month to month. Internally, processes are fluid and there is a high degree of openness to outside influences and new ideas.
Momentum and market awareness build slowly in this first phase – often at what feels like a glacial pace. Eventually, you begin to get a clear sense of who your market is; they just don’t know yet who you are.
As the months and years pass, you become more deliberate and strategic… and your relevance steadily grows to the point where you reach a thrilling milestone that dreams are made of and bestselling books have been written about: the Tipping Point. It is at this point that relevance begins to grow exponentially and momentum really kicks in. You have entered a new stage of your relevance – Phase Two.
Phase 2: Prominence
This new phase is an exciting time on the Relevance Curve. If you were to liken it to a season it would undoubtedly be summer. The entity goes from strength to strength, emerging into the limelight from relative obscurity.
You are getting an ever-clearer idea of the needs and nature of your target market. Even more exciting is the fact that they are also beginning to know who you are too. Over time you develop a band of raving fans who love what you do and influence the marketplace to do the same.
It is at about this time that the strategic focus shifts from creativity and innovation to an emphasis on growth and expansion. In order to support the burgeoning success, the entity’s back-end administrative function also expands.
Staff numbers and office sizes increase. At the same time, internal systems and processes begin to form as ‘best practices’ are identified. Lines of authority are established and management structures solidify in the name of efficiency.
As you continue to ascend through the second phase, you become mainstream, popular, widely accepted and possibly even ubiquitous. Near the top of the curve in this second phase, you enter what Derek Zoolander would call the ‘so hot right now’ stage. This is a time where all manner of clichés could be used to describe your success. You are ‘in the zone’; ’on message’; ‘firing on all cylinders’; and in a ‘sweet spot.’ You can’t seem to put a foot wrong.
A sense of invincibility
By now, competitors have started to pay attention – emulating your success formula and viewing you as a benchmark for excellence. It is also at about this point that your reliance on market feedback begins to taper off. You are beginning to form a clear identity of who you are – but also who you are not. This is a time of streamlining and specialization.
While the ‘so hot right now’ stage can be enormously exciting, it is also the single most dangerous stage on the Relevance Curve for any entity. The reason for this is simple: with great success comes an enormous temptation to start resting on your laurels. It is easy to start believing your own press, become mildly complacent and even develop a sense of invincibility.
However, this stage is a time for vigilance and a re-doubling of effort. If you don’t take active steps and keep doing the fundamentals that saw you succeed in the first place, slowly but surely you will begin to drift. It may take months, years or decades, but without deliberate effort you will eventually pass a second invisible trigger called the Turning Point – a point which marks the transition from Phase Two to Phase Three.
Phase 3: Irrelevance
While the transition from relevance to irrelevance is usually unheralded, it is not entirely imperceptible. In fact, I would suggest that organizations and leaders usually know the very moment they pass the Turning Point because there will be an undeniable, ever-growing, gnawing sense that something is missing.
It is as if the sense of freshness and vitality that once typified the entity seems to have evaporated. Staff members are doing the same things they’ve always been doing, but now it just feels like drudgery or “going through the motions”. Even the entity’s slogans, phrases and messaging which once held such meaning begin to feel like empty rhetoric.
The early stages of Phase Three can be very confusing because even though there is a sense that something is awry, typically there is no evidence of the fact. Sales graphs are often still pointing skywards; expansion plans may be on the boil; the balance sheet appears healthy. However, these lagging indicators mask weaknesses that have not yet become apparent.
As a result, leaders tend to ignore their gut sense that something has changed and continue with ‘business as usual’. This is often under the justifiable but erroneous assumption that if they keep doing what they have always done, they will keep getting the results they have always enjoyed.
The trap of ‘cheaper, quicker, more’
At an organizational level, the early stages of Phase Three tend to be when another set of dangerous dynamics come into play. The Phase Two focus on growth and expansion gives way to a drive for efficiency – the compulsion to do things marginally cheaper or faster than in the past.
At the same time, leaders unconsciously shift into manage ment-mode with an emphasis on quality control and continuous incremental improvement. Internal processes and systems begin to ossify and harden at the cost of agility and responsiveness. The momentum of past successes makes it difficult to introduce change. Openness to innovation gives way to a resistance of it; bureaucracy and red tape begin to slowly choke the entity from the inside out.
Somewhere around half to two-thirds of the way into Phase Three, typically the entity reaches a point of crisis. At first, it is a bad month. Then it is a bad quarter… and then a bad year. Perhaps you start experiencing attrition as members and clients drift away. Market share starts to fall as newer and more nimble start-ups begin beating you at your own game.
While at first these negative results are typically dismissed as an anomaly, a temporary downturn or just part of a cycle “we’ve seen before”, eventually the writing on the wall becomes clear: you are not as ‘hot’ or relevant as you used to be.
Although this point of crisis may be confronting and even terrifying, it can also be a gift. After all, when times get tough, individuals and organizations suddenly become willing to try new things and make changes that they may otherwise have resisted when times were good.
Further still, crises have a unique way of stimulating creativity and innovation. Necessity is indeed the mother of invention.
The good news is that if entities play their cards right at the point of crisis, they can turn things around and regain momentum, vitality and relevance. Take the wrong steps or simply do nothing however, and you will inevitably continue on the downward slide toward a third trigger known as The Tanking Point.
Phase 4: Obsolescence
As you pass The Tanking Point and enter the final phase of the Relevance Curve, momentum is now working against you. By this point, denial, scarcity and protectionism become dominant forces. Fear creeps in and becomes the key driver of behavior. The strategic focus shifts from efficiency to cost-reduction and damage control.
It is at this point that rash decisions are made and sweeping changes are introduced. However, akin to rearranging deck chairs on the Titanic, such activity is often too little, too late.
As the entity crumbles, staff members, customers and shareholders jump ship. By this point, everyone is asking the question ‘what happened’ or ‘where did we go wrong?’ Competitors begin to circle and hostile takeover bids are made. Eventually, the entity is acquired; re-badged; or slowly grinds to a halt having become completely and utterly obsolete.
While this cycle may appear fatalistic and even a little defeatist, in chapter 4 we will explore the important question of whether obsolescence and decline is indeed an unavoidable fate or merely the consequence of decisions made and actions taken.
In the next chapter however, we will look at how the Relevance Curve helps us make sense of the patterns we see in everything from the rise and fall of civilizations to the erosion of societal institutions and the passing parade of fads and fashions in popular culture. After all, what do the Portuguese Empire, the PTA and pay phones have in common? Read ahead and you’ll find out.
While the cycle we discussed in the previous chapter may be a convenient theoretical model, the true value of the Relevance Curve becomes clear when it is applied to life.
German philosopher Friedrich Engels once argued that an ounce of reality is worth a ton of theory and I am inclined to agree. I believe that theories only prove useful if they help us make sense of the experiences and practical realities we are confronted with in everyday life.
To this end, in the coming pages we will look at a number of facets of society and culture where the Relevance Curve is clearly at work – whether we have realized it previously or not.
The Relevance Curve in History
A few years ago, my wife and I were on our first trip to Rome. Having spent almost a month travelling around Italy, we were a little cathedral-weary and yet we figured that as the saying goes, “When in Rome…” and so we booked in for a tour of the Vatican.
Halfway through our guided tour of the Sistine Chapel, our guide explained the origins of the Vatican City as a sovereign state and the importance of the Lateran Treaty of 1929. This agreement, we learned, was made between Italy’s Prime Minister at the time, Mussolini, and Pope Pius XI, and established the Vatican City as a self-governing entity.
“The Lateran Treaty states that as long as the Vatican stands, it is to be given a guarantee of full and independent sovereignty from Italy,” our guide explained.
As we set off again on our tour, a young boy in our group worked up the courage to ask a question. “But what if The Vatican falls one day?” he enquired. “Would the Vatican City become a part of Italy again?”
Our guide paused, turned around with a smile seeking out the boy and replied “That is a very interesting question. What’s your name?”
“Isaac” said the boy stepping forward with a mixture of certainty and pride.
Crouching down, our guide explained, “Well Isaac, I guess if the Vatican fell the land would have to go back to Italy. But don’t worry,’ she continued ‘The Vatican will never fall.”
In the days that followed, Isaac’s question stuck with me. Even though it may seem inconceivable that one of the worlds most powerful and wealthy institutions could one day fall, there is no reason why this could not and will not one day happen. After all, history features a long procession of empires that dominated culture and spanned the globe only to see their power and positions erode with time.
From the ancient Egyptians, Hittites and Chou Dynasty through to the Romans, the Vikings, the Portuguese and the Ottomans, every great empire or civilization has followed a pattern of rise and fall remarkably similar to the one described in the previous chapter.
In more recent centuries, we have seen the Dutch, the Spanish and the British empires lose their status as global powers. Currently, many analysts are pondering whether America is next.1 Even U.S. President Obama acknowledged this question in his 2012 State of the Union Address rather aptly titled “An America Built to Last”.2
The pre-eminent historian Norman Davies once said: “All states and nations, however great, bloom for a season and are replaced.”3
To paraphrase Davies’ observation, history shows us that even the greatest nations and empires are not immune to the Relevance Curve cycle.
The Relevance Curve in Societal Institutions
The journey of community service organizations such as Apex, Rotary and Lions throughout the 20th Century has many ways epitomized the Relevance Curve.
The early 1900s saw a host of new service clubs and membership-based associations spring up throughout the western world. Many of these passed the Tipping Point in the late 1930s and by the early 1940s were well and truly into the ‘so hot right now’ stage of Phase 2. Indicative of this, community service organizations in the U.S. saw their membership double in size between 1940 and 1945.4
Somewhere during the 1960s, however, many of these organizations passed their respective Turning Points and entered Phase Three on the Relevance Curve with growth and momentum stagnating. By the mid-1980s, community service groups began a steady decline to the point where by 1997, membership of these organizations in the U.S. was half the size of the 1960’s peak.5
The Parent Teacher Association (PTA) in America is another good example of the Relevance Curve in action. In the 1960s the organization boasted a larger membership base than any other secular organization in America, but by the mid-90s the PTA had lost over half a million members.6
Curiously, this attrition occurred over a period when the number of American families with children under the age of 18 grew by 2 million.7 In other words, it wasn’t that there were fewer parents in the 1990s than in the 1960s, but rather that PTA membership had become seen as less appealing to parents 30 years on.
In his book Bowling Alone, Professor of Public Policy at Harvard Robert D Putnam, observes: “Somehow in the last several decades of the twentieth century, community groups started to fade. It wasn’t that older members dropped out, but that community organizations were no longer continuously revitalized by new members.”8
Naturally, this begs the question: why aren’t these organizations attracting new members?
The simple answer comes back to relevance. Organizations that are relevant to their time and to the needs of their respective communities will always attract new members naturally and effortlessly. However, the opposite is also true: organizations that lose touch with the times or the needs of their members find it near impossible to attract new members.
Looking to a very different societal institution, trade unions have faced similar relevance challenges in recent decades.
For many years, unions provided valuable security and empowerment for working class employees who may otherwise have fallen prey to unfair work conditions or exploitation. At it’s peak in the 1950s, union membership in the U.S. stood at about 32.5% while in other countries like Australia union membership topped 57% of the working population during the mid-1970s.9 Just a handful of decades later however, it is a very different story. Unionization in the US today has sunk to around 12% and around 18% in Australia.10
While there are a number of reasons for this decline, research indicates that the primary cause is that people are simply not as interested in, or feel they are in need of union representation as they were previously. In short, unions are seen as less relevant to the working class today than they once were.11
As an interesting contrast, at the same time as union membership has declined, affiliation with industry associations has grown. In the 1950s, less than 10% of American workers belonged to a professional association but by the mid-1990s this number had doubled.12
Returning to a theme we began with in the opening pages of this book, one area where the Relevance Curve is particularly apparent is in religious adherence and church attendance.
While people’s religious beliefs might not have changed enormously over the last half century – with the vast majority of people still believing in the existence of God and in life after death13 – levels of religious affiliation and engagement have fallen significantly over the same time period.
In the United States, the rate of formal religious adherence dropped roughly 10-12% between the 1960s and 1990s14 while the percentage of Americans who described themselves as having no formal religion rose from 2% in 196715 to over 20% in 2012.16
Similar trends are unfolding in the U.K. In the 2011 census for England and Wales, the percentage of the population calling itself Christian fell to 59.3% - down from almost 72% a decade earlier. Further still, the census revealed that the number of people professing no religious faith had increased from 14.8% to just over 25% in the space of 10 years.17
In Australia, a wide-scale study looking at religious adherence in the City of Melbourne found that a staggering 80% of the metropolitan population had little or no church affiliation and that religious institutions were losing members at a rate of 4,500 people per year. This, at a time when the city’s population is growing by 90,000 people annually.18
This data can leave us with little doubt that at some point over the past few decades, many churches and religious institutions have started becoming less relevant to the needs and lives of their local communities – a theme we will pick up on in chapter 5.
The Relevance Curve in Popular Culture
Finally, popular culture offers us a long list of fads, fashions and products that have followed the cycle of emergence to prominence and then obsolescence.
Consider:
I hope you are left with as little doubt as I am that the Relevance Curve is more than just a convenient theory. Whether in the form of social institutions, fads and fashions or the annals of history, the path from prominence to obsolescence is in fact a well-worn road.
The next chapter is dedicated to helping you determine where you are on the Relevance Curve at this very moment. Are you on the way up, riding high in the ‘so hot right now’ stage or are you on the downward slide?
The reason this is so important is that where you are right now on the Relevance Curve will determine the steps you will need to take in order to win the battle for relevance in the years to come.
A few years ago I visited an osteopath following the recommendation of a good friend. Having seen scores of chiropractors and physiotherapists over the years, I was curious to see how osteopathy would differ.
The moment I walked into his clinic, it was clear that Warren was not your typical health practitioner. His waiting room was jam-packed with herbs and trinkets; a strong scent of incense permeated his rooms; and the music playing softly in the background was something I’d expect to hear at a Balinese massage house rather than a medical clinic.
In person, Warren had a disarming manner and sense of humor that immediately put me at ease. He began with all the usual questions about my personal and medical history and I expected him then to examine my posture and alignment, perhaps even ordering an X-ray like everyone else I’ve seen over the years. Instead, Warren asked to examine my tongue.
Looking intently into my mouth, he rattled off a series of observations about my diet, stress levels and sleep patterns – all of which were spot-on. Then, reaching for my right wrist, he said, “Now let’s check the health of your liver.”
I was intrigued. “How can you tell by looking at my wrist?” I asked.
“I’m checking your liver’s pulse,” he replied pointing to a different part of my wrist to where you’d normally check your heart rate.
“Just as I suspected, your liver pulse is weak,” he said. Warren went on to prescribe a host of odd-sounding vitamins and supplements plus a diet rich in raw fruits and vegetables.
To this day, I am not sure how accurate Warren’s diagnosis or methods were, though they certainly appeared to restore me to good health. My visit that day did however start me thinking – how many ‘pulses’ do our bodies have that we completely ignore? How many signals could we be missing and have no idea?
Taking an organization’s ‘pulse’
From an organizational and leadership perspective, I wonder the same thing. In measuring the health, vitality and relevance of a business or organization, I suspect that many leaders pay attention to only a narrow range of signals and therefore develop a warped view of how they are really tracking.
In my role as a consultant, I always begin my work with clients by exploring how their organization measures success. The reason for this is simple - how a business or organization measures success drives everything else that it does: the decisions it makes; the habits it discourages; and the behaviors it rewards.
Regardless of the industry or country in which I find myself, it is fascinating to discover how similarly clients gauge their success - typically by measuring a range of quantifiable indicators which I refer to as an organization’s audible pulse.
Below are some of the more common responses I have received over the years when asking clients to finish the sentence “We’ll know we are successful when…”
While these traditional ways of measuring success can help to balance budgets, predict cash flows and monitor expenses, they can also be dangerously inadequate and notoriously unreliable indicators of an organization’s true health.
History shows this to be the case. Consider the fact that of the 100 biggest and most financially successful companies in 1912, one in 10 was out of business a decade later.19
Similarly, when Tom Peters and Robert Waterman released In Search of Excellence in 1982, it was described at the time as the world’s most comprehensive and accurate study of business success. Two years later Business Week found that one-third of Peters’ and Waterman’s 43 ‘success stories’ were in serious financial trouble or on the brink of collapse.20
One such company was consumer electronics giant Digital. Ironically, at the very time Digital was receiving accolades for business excellence, it was ignoring the arrival of desktop computers – an oversight which would put it out of business a few short years later.21
In their landmark 1994 book Built to Last, Jim Collins and Jerry Porras also compiled a list of 18 successful companies that they believed would stand the test of time due to their ‘visionary’ approaches. Paradoxically, at the 10-year anniversary of the book’s release, seven of the original eighteen companies had stumbled from greatness.22
Looking at more recent failure stories like Kodak, Nortel and Borders, it was only a relatively few short years ago that these organizations were the outward picture of success. Sales were buoyant, profit margins healthy, market share enviable. The audible pulse of each organization was strong. As Forbes’ Frederick Allen describes it, Kodak was still the darling of Wall Street many years after it had begun to lose the digital war.23
Herein lies a principle that ought to give every reader pause for thought: businesses, organizations and institutions are often way down the track toward decline and obsolescence long before there is any external evidence of the fact. To put it more simply, it is possible to be on the brink of obsolescence and have absolutely no idea at all!
Naturally, I am not recommending that leaders ignore or dismiss the quantifiable measures of their organization’s health such as sales figures and financial results. Rather, it is important that we see these things for what they are – lagging indicators.
While such ‘audible pulses’ offer an insight to the effectiveness of past decisions and investments, they give limited insight into an organizations present underlying health, much less an accurate forecast of the future. To gauge an entity’s true health, leaders would be better served to pay attention to the measure of their relevance – otherwise known as their silent pulse.
An entity’s silent pulse is like an early detection alarm or a bellwether. It is the canary in the coalmine heralding threats that may not yet be evident.
Howard Schultz recognized the importance of a business’s silent pulse upon his return to the helm of Starbucks in January 2008. Schultz recognized that even though Starbucks had been hitting home runs year on year in terms of growth, he sensed that nevertheless something was wrong.
As Schultz described it, Starbucks was failing to create the ‘soulful, romantic experience’ for customers for which it had once been renowned. “We’d lost sight of the experience around the coffee and we were too focused on ringing the register,” Schultz admitted.24 To put it differently, Schultz knew that while Starbucks’ audible pulse was strong, the company’s silent pulse was anything but. In chapter 10, we will explore the steps he took to turn things around.
When former Google executive Marissa Mayer took the reins at Yahoo, she also took immediate steps to focus the company on its silent pulse. One way Mayer did this was to simply remove Yahoo’s live-feed share price indicator from the company’s internal website.
“I want you thinking about users,” Mayer stressed early in her leadership. In this, the incoming CEO was signaling to employees that it was more important for Yahoo to focus on their silent pulse by creating exciting web services than monitoring their audible pulse as expressed in company stock levels.25
Measuring an entity’s Silent Pulse
When I share the concept of a silent pulse with clients, one of the common challenges that arises is that of objectivity and measurement. After all, it is easy to gauge audible pulse indicators like sales data and KPIs whereas implicit silent pulse indicators can be relegated to being little more than subjective ‘gut feel’ judgments.
In an effort to help clients objectify and measure their silent pulse, I have developed the simple diagnostic tool below which I urge you to take this opportunity to complete.
Reflecting on the statements below, indicate on a scale from one to 10 how true they are of your business, brand or organization at this moment:
Next, using the scale gradient on the curve below, place a mark where your ratings total would place you right now.
When the truth is hard to hear
Naturally, discovering just how relevant your business, brand or organization is can be confronting. I clearly remember working with one particular client for whom this was the case.
Spending the day consulting with this client company’s sales and marketing team, I guided them through the above diagnostic and the results were unambiguous – their silent pulse was at about the 30 mark and they were perilously close to Tanking Point.
What was perhaps most confronting about this outcome was this company had been at the top of their game for decades. Dominant, successful and highly profitable, they were envied by competitors and the benchmark of their industry. And yet, in just a handful of years, everything had changed.
As it happened, everyone in the company’s senior management sensed that they’d passed the Turning Point a way back – some even described it as the organization’s ‘elephant in the room’. However, no-one was able to put their finger on exactly why things felt so out of sync.
Upon confronting the reality of their flagging silent pulse, discussion in the room revolved around two questions:
1. What happened – how did we go off-track after being so hot for so many years?
2. What can we do about it - how can we regain relevance and market leadership and get back ahead of the curve? Importantly, this client was adamant that they didn’t want to wait for a point of crisis to force their hand – they wanted to make the necessary changes strategically and not reactively.
Perhaps like in the case of my client, the discovery of how relevant you truly are is both confronting and uncomfortable. Nevertheless, gaining a clear and accurate sense of where you are on the Relevance Curve is critically important. After all, knowing where you currently stand will help you to develop a map for the road that lies ahead.
Exercise: Consider your competitors
While it is valuable to discover your own position on the Relevance Curve, it is equally important to be clear on where your competitors stand.
List your top 5 competitors by assigning them a letter below. Next, place the letter for each competitor where you believe they are right now on the same Relevance Curve you used to determine your own position.
A. __________________
B. __________________
C. __________________
D. __________________
E. __________________
Consider what the relative position of your competitors on the Relevance Curve may mean in for you the years to come.
A few years ago I had a revealing conversation with the president of one of the largest nonprofit groups in the world. Following a presentation I made to the organization’s leadership, the president and I walked backstage and in the course of our conversation I asked about his vision for the next few years. His response was surprising.
“I often wonder what the future holds,” the leader said humbly. “After so much enduring success and influence I sometimes fear that the only way from here is downhill.”
I reflected for days afterwards on his words. Is decline after success inevitable I wondered, in the way that winter follows autumn?
As I considered the possibility, I recalled a principle I’d learned in high school physics: the Law of Entropy. In layman’s terms, this second law of thermodynamics states that everything in Nature is always moving from integration to disintegration. Nothing stands still nor lasts forever, and natural cycles of degeneration, decomposition and deterioration ensure that this is the case.
The great King Solomon reflected on this phenomenon when the famously wrote that there is a time and season for everything; for birth and death; for building up and tearing down.26
Modern thinkers echo the same sentiment. As one former Kodak chairman almost prophetically suggested, “No company has a God-given right to survive. Maybe there is a natural cycle to companies – they grow, are successful, then decline and end.”27
This of course prompts questions about the future prospects of modern day success stories such as IKEA, Google, and Apple. In the case of Apple for instance, the passing of Steve Jobs has led many to wonder whether in fact he was indeed the secret ingredient to the brand’s success and that company’s best days are therefore behind them. Giving validity to this prediction, in 2012 Apple fell from 5th to 26th in Forbes’ ranking of the world’s most innovative companies28 and have recently seen their share price take a battering.
So while Apple are is of the world’s most valuable companies and can boast revenues in 2012 which exceeded Microsoft, Google and Facebook combined,29 analysts are already suggesting that the company’s dream run cannot and will not continue forever.30
While the demise of a brand like Apple may seem implausible, history leaves us in no doubt that simply because a business or organization has been successful, dominant or powerful in the past does not automatically mean it will remain so in the future.
Along these very lines, Jim Collins in his book How the Mighty Fall, argues: “There is no law of nature that the most powerful will remain at the top. Anyone can fall and most eventually do.”31
To this extent, the president of the non-profit organization I spoke with backstage was correct to assume that what goes up, must come down. And yet, his assumption that day didn’t sit well with me. It seemed too fatalistic. What about the human capacity for innovation, ingenuity and reinvention? What of the drive to survive, the ability to adapt, and the instinct to evolve?
A number of months following the conversation, I stumbled across a definition of the Law of Entropy which helped me reconcile all that we know about human capabilities while not discounting the natural cycles that are beyond human control. This definition described entropy as the process by which “anything left to itself will naturally tend towards decay”.
What I like most about this definition are the four words “anything left to itself”. After all, while it is true that nothing on earth lasts forever, it is also true that many great organizations, businesses, products and movements decline long before their time because of specific actions, or inaction.
In the 2008 business tome, Billion-Dollar Lessons, authors Carroll and Mui suggest that almost one in two business failures (of the 750 corporations they researched) could have been avoided if the companies had only taken action in the face of specific warnings.32
Naturally, no business or organization sets out to fail. However, while the battle for relevance may not be intentionally lost, that doesn’t mean the decline is accidental. What are the warning signs that Carroll and Mui alluded to?
Destinations you may wish to avoid
While the journey to irrelevance is often incremental and unconscious, it is also predictable and measurable.
In Section 2 we are going to look at five specific drivers of organizational entropy – or what I call the five roads to irrelevance. Each of these drivers in one way or another has contributed to the demise or obsolescence of almost every iconic business, brand or idea throughout human history.
If you have a sinking feeling that you may already be on the downward slide, take heart game is not over yet. Even if the momentum and vitality of the past seem like a distant memory, it is never too late to turn things around. In the next couple of chapters, you will discover that the challenges you face are neither new nor unique.
For those who are still ascending the Relevance Curve in phase one or two, the coming chapters are designed to serve as signposts to destinations you may prefer to avoid in the future.33 As the adage says, a wise person learns from their mistakes, a much wiser person learns from someone else’s.34
Certainly, I have always found it smarter to place a warning sign at the top of a cliff in preference to stationing an ambulance at the bottom! My hope is that section 2 offers just the warning signs you need to stay clear of danger.
SECTION 2: The 5 Roads to Irrelevance
1. Shift Happens
2. The Intoxication of Success
3. Preservation Obsession
4. Progress Addiction
5. The Human Factor
On the 23rd of February 1905, four young businessmen met at a downtown Chicago office boardroom for an informal lunch. Enjoying their time together, they agreed to meet the following week and before long, their lunch meetings became a regular occurrence.
Over the coming months, each member of the group invited colleagues and friends to join the weekly gatherings and within a year these meetings had become so popular that breakaway groups formed. And thus, an organization that would change the course of human history was born. Its name: Rotary.
From these humble beginnings, Rotary grew in popularity at a breathtaking pace. The organization’s focus on drawing together business people in local communities for the purpose of networking and community service saw membership grow to 20,000 by 1925.
In the decades that followed, Rotary’s size, stature and influence continued to grow to the point where in 1985 the organization set out a bold plan to eradicate polio from the face of the planet. While a feat of this magnitude had never been attempted by any one organization, the determination and commitment of Rotarians worldwide saw this ambitious goal all but reached by the late 2000s.
Today, Rotary is one of the world’s preeminent non-government organizations with over 1.2 million members across 200 countries. However, while this headline membership figure may be impressive, what it doesn’t show is that Rotary, like almost all service organizations, has seen its growth rates stagnate in recent decades.