For the first time in almost three years I’ve had a car this week, (thanks to the generosity of Rob “Gadget” Wellstead of Lenwell who offered his BMW i8 for a week at a charity auction which I bid for and won), and wow, how things have changed!
The first car I really enjoyed was a BMW 5 series in 1984 and the i8 has done a lot to remind me of why this brand is so enduring in its appeal. Whereas the 5 has had 100+ largely incremental changes over 30 years, for me the i8 is a real “game-changer”, an electric “super car” with a 1.5 litre engine that can deliver 0-100km/h in 4.4seconds!
I believe all businesses have to be in a constant state of change but need to know what type of change they need to effect. I suggest there are three kinds:
- Incremental Change. The 5 series BMW illustrates this perfectly. Every year add and improve in several ways – as Sir Clive Woodward put it “Winning the Rugby world cup was not about doing one thing 100% better, but about doing 100 things 1% better”. Building on this idea, Sir David Brailsford, Team Leader for both GB Olympic and Sky cycle teams believes that by breaking down and identifying every tiny aspect of an athlete’s performance and then making just a 1% improvement in each area the athlete’s overall performance can be significantly enhanced. I’m convinced this also applies to most businesses.
- Step Change. This is where you make a really significant change to your business, perhaps changing the pricing model or moving online from a bricks and mortar operation. Burberry, Beats by Dre and Netflix are three examples of companies that have made successful Step changes in recent years.
- Game-changer. The type of change that redefines an industry – think Amazon, Zipcar, AirBNB, the BMW i8 and the Tesla too. This is when a company changes the rules for itself and for the industry sector. The new model, “online only”, estate agencies are attempting to “game-change” – time will tell whether they can, not all game-changing attempts work.
The key though is to know when to move from incremental to step – this is where many businesses get it wrong, either making the step too early or too late.
Incremental change should be continuous, the “kaizen” approach as defined by W. Edwards Deming in post WW2 in Japan but every so often a business should ask “is it time for a step change?” and then stop the tinkering and make a major adjustment or change of direction.
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