"There is nothing so stable as change". If life imitates art, Bob Dylan's famous quote expresses very well an increasingly frequent dynamic in the lives of marketing professionals and organizations in general: change is a constant. A study carried out by Forbes and Gartner in 2019 showed that companies experienced an average of three major changes during that year, whether in their strategies, business models or structures, while in 2012 this indicator was less than two. If the growth in 2019 compared to 2012 was already significant, what about the years 2020 and 2021, radically impacted by the COVID-19 pandemic?
We are experiencing an era of radical transformations in established business models, due to the impacts generated by the new coronavirus. Retail chains have transformed physical stores, closed due to the pandemic, into mini distribution centers located at strategic points closer to their consumers. Doctors, accustomed to establishing a face-to-face relationship with their patients, have started seeing them via WhatsApp. Hotels, in the absence of tourists, have turned their available rooms into remote work spaces for those who can't work from home. And airlines, which are part of one of the sectors most affected by the crisis, have opened restaurants to offer gastronomic experiences to their nostalgic customers (how about paying R$3,000 to dine on an All Nippon Airways plane on the ground?).
This is not the first time that companies have undergone abrupt changes in their business models. The Industrial Revolution, the two World Wars and the technological revolution with the advent of computers and the internet are just a few examples. In all cases, consolidated companies ceased to exist, others were able to survive, while new players emerged.
What allows some organizations to overcome these turbulent times, while others become extinct? To discuss this topic, we can draw a parallel with Charles Darwin's theory of Natural Selection. Natural selection occurs due to the need for species to survive and adapt to their environment. Individuals with characteristics more suited to the environment are more likely to survive, while those less adapted cease to exist. The same happens with companies: those that are better adapted to the environment have a greater chance of survival.
In order to achieve this alignment with the environment, many organizations design their processes, practices and structures to ensure long-term efficiency and effectiveness, considering a projection of the future in stable and predictable circumstances. However, what is a strength in a controlled context becomes a weakness in times of change, when flexibility becomes mandatory for survival. And if change is increasingly a constant, being flexible is imperative: organizations must be increasingly prepared for disruptive changes and multiple futures, not just one future. They must consider that the environment is increasingly volatile.
This ability to adapt quickly allows organizations to keep the characteristics that remain valid in a new context, eliminate those that have become obsolete, and add new ones to ensure their competitiveness and resilience. These are companies that adopt a flexible mindset and see themselves as modular, made up of a combination of different components that are connected and disconnected as necessary: Keep the best, reset the rest is a motto that sums up the principle of modularity. These companies are called Composable Businesses because of their modular structure, and they have four main pillars:
- MindsetFlexibility and modularity are not just characteristics of small companies or start-ups. Large organizations can also adopt this model, which leads us to observe the importance of mindset. Having a mindset that is focused on adaptability and experimentation, that questions the status quo, that is open to identifying new opportunities and that understands that everything can be changed is the first step to surviving changes in the environment.
- Culture: a work environment that encourages people to collaborate and experiment with new ideas is fundamental to the organization's adaptability. And when you talk about experimentation, you're talking about testing new things and making mistakes. In this context, the culture must not be punitive, it must accept error and see it as learning and part of the process of evolution.
- Structure and purpose: the company should have a fluid structure, focused on the activities needed to achieve a certain purpose, and not based on fixed positions and hierarchies. This means that teams are created and broken up according to the projects of the moment, and leadership is assumed by whoever has the capabilities most aligned with the objectives of that project. This concept, which can be reflected in the squads model, is already being adopted by many organizations.
- Technology: considered a tool in many companies, technology is taking centre stage in modular organizations. It provides new working dynamics, such as the formation of remote groups (eliminating the geographical barrier), automation to eliminate non-essential business processes, the generation of faster and more complex insights through Artificial Intelligence, among others.
If there is nothing as stable as change, knowing how to face it is a sine qua non for survival. There is no single model or standard to follow; each company needs to read its environment and know how best to adapt. And if companies are made up of people, the important thing is that people see change as a moment of constant evolution and progress.
