The rules I am referring to are the ones that shape the mental models about business. Most of today’s current views have been shaped by the previous rules embedded by past experiences, patterns of once productive thinking, conventional wisdom, best practices and dominant logic.
Today many leaders are hanging onto rules (mental models that are no longer relevant) and trying to force the market to obey those rules. Think about J.C. Penny and how Ron Johnson thought that the solution to reinvigorate an old business model was to roll out a new pricing strategy. His solution was not even close to being relevant to the market J.C. Penny had been or was trying to serve even if they knew what that market was anymore.
J.C. Penny represents a struggling breed of broken retail business models riddled with excessive cost, out of touch engagement strategies bound by old real estate contracts that suck shareholders equity and cash flow out the back door. With a hyper competitive marketplace and unlimited choices for buyers, margins are thin and “the building” is not the engagement factor in the digital era. Today the rules have changed but many business leaders are following yesterday’s rules.
Today’s Realities Are Not an Extensions of Yesterday’s Rules
Companies, and leaders, get stuck in a rut. The rut is a pattern of behavior and thinking that holds them hostage when faced with a changing environment. So what do they usually do? What they’ve always done because rather than seeking help to think outside their comfort zone, to put aside their egos, to lead rather than control they throw old ideas up against the wall and hope one of them will stick. The problem is none of the ideas are relevant to the realities of today’s market dynamics.
The realities are the rules have changed and the markets are playing by a set of new rules different than the rules of the 20th Century business models. Employees and buyers believe in different rules and they have the rule book, you don’t. The way they keep score is much different than the way you keep score. Their score is based on value creation which is a constant rather than a static process.
Yesterday’s rules cannot create tomorrow’s value. That is why today’s realities never fit yesterday’s rules. To stay relevant you have to create new rules or at least follow how the market “rules”.