Most failures have nothing to do with strategy. Most hinge on execution. As you grow and move faster, you must master more plain-vanilla tasks. Do you have the right information systems in place? Can you forecast demand? Can you get products out of the factory and deliver them? They are fundamental processes that can derail your business very quickly if you don't pay attention.
Leaders today must also heed enterprise elasticity: How far can I stretch the place? Can I take a large organization and grow it at 30% to 40% a year? If so, how much do I stretch people? Do I stretch them beyond their capacity? If I do, what will happen? Sometimes people start doing things because they fear failure. Those actions often contradict the organization's goals and result in ugly outcomes.
Clearly, a leader has to recognize his organization's bandwidth for plausible change and think, "If I listen to what everyone says, I won't move fast enough. But if I move too fast for too long, I will start to break the thing."
Henry Schacht of Lucent argues that if you can raise people's expectations, results will follow. He's absolutely right. But at some point, people may feel that your expectations are simply beyond organization's the physical capacity. A leader has to be sensitive to the shift. You have to create some process for assessing whether employees are signaling a resistance to change or a test of the leader's sanity.
Companies don't exist forever. Some survive for long periods of time, but immortality is the exception rather than the rule. Few companies figure out what enables them to live through different eras while there are massive moves in how value is created. Only a few sense those shifts over time and understand themselves well enough to ask, "How can we leverage what we do well to take advantage of change?"
Corning is about to celebrate its 150th anniversary. Not many 150-year-old organizations are widely recognized as successful growth companies. Corning has thrived for so long because it doesn't define itself by its products. Its brand revolves around a commitment to science, invention, and innovation. Corning is an organization whose investments in science lead to discoveries that become leading products or technologies over time. Second, Corning understands that processes, particularly in manufacturing, are important.
And by the way, Corning also knows how to exit a market space. They don't make lightbulbs anymore. They're mostly out of the picture-tube business and the sunglasses business. They've ditched cookware. Why? Because at some point they said, "This is a business that no longer capitalizes on our strengths. We are a company engaged in science, invention, and processes -- usually in things we hope will change the world. That's not what this business is about." They have a clear sense of themselves. Bigger isn't always better.
Right now, my clients are figuring out how to apply the brakes. On one hand, companies realize that the demand for speed means they need to brake faster in times like these. The thinking is "We went through period of rapid growth -- and growth hides a lot of sins -- so it's healthy to stop and take a look at cost structures and people now." When talent is scarce, you hire aggressively. As long as people can fog up a mirror, you keep them. Now, guess what? This is probably a good opportunity to take a look at how well your people are really working.
On the other hand, leaders are balancing short-term and long-term objectives better than in previous cycles. Companies are saying, "We have to lay off some people. But what if we lay off 40 people -- employees whom we spent a lot of time and money recruiting and retaining -- and a year from now we realize that they are critical to our business?" Leaders today appreciate the scarcity and value of talent.
Keith H. Hammonds (khammonds@fastcompany.com) is a Fast Company senior editor.
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