According to the patterns revealed by my many years researching business success and failure, small bets are far more successful than big bets. This is even true for companies thought to be in big bet industries, such as aircraft producers like Boeing,
Success is far more likely when companies move forward in a stepwise evolutionary fashion. Transformation efforts that entail a huge jump forward with drastic change are so much harder for companies to successfully pull off. Companies generally do far better when their transformations are via evolution, rather than revolution.
We are reminded of this by the December 16-17, 2023 Wall Street Journal article “Mary Barra’s Big Problems” by Mike Colias. Barra is CEO of General Motors and the article is subtitled “The CEO spent a decade transforming GM by pushing it into electric and driverless cars. The finish line keeps moving.”
General Motors is encountering many obstacles and challenges as it strives to transform itself from a maker of traditional vehicles to a producer of electric cars. These kinds of challenges are typical of what might occur when companies set long term goals that take the business in a totally new direction. In these kinds of situations, many obstacles emerge and success can seem elusive.
Yet, despite the tremendous challenges of a major transformation, sometimes companies have valid reasons for pursuing phenomenal change. For companies like GM, regulatory and political issues can play a role. Thus, some companies may choose to pursue a major revolutionary change despite the challenges associated with doing so. However, companies opting for such a major transformation must recognize that their path will entail more challenges and barriers to success than would occur with more gradual stepwise change.
Another Wall Street Journal article emphasizing the auto industry’s challenges ran on December 28, 2023 discussing the difficulties the industry is facing as it moves forward toward more electric vehicles That article is titled “Electric Vehicles Lose Momentum in the U.S.”
Again, these kinds of challenges are typical when companies set long term transformational goals that entail approaches very different from what the business previously did. These types of obstacles are not unique to General Motors. Awhile back, IBM faced challenges when it embarked upon major change as it pursued transformational endeavors like Watson healthcare.
In summary, the lesson here is that more gradual evolutionary change is generally more successful than drastic revolutionary transformation. And, even when companies allow many years for the revolutionary change to occur, they may find that “the finish line keeps moving”.
