Should Businesses Make Big Changes or Stick to What They Know?

Both Southwest Airlines and Google began as entrepreneurial start-ups that grew rather rapidly into major corporations. Both have been extremely successful, even after growing quite large. Both were the subject of articles in the January 14, 2013 issue of Fortune magazine, and both articles included the founders’ views on change.

It is easy to come away from those two Fortune articles with the impression that Google founder Larry Page’s views about how much to change seem to conflict with the views of Southwest founder Herb Kelleher. According to Fortune, Google founder Larry Page believes in big change and has an affinity for ideas that might be considered crazy. In another article in that same issue of Fortune, Southwest founder Herb Kelleher advocates sticking to what you know, with Southwest staying away from anything not connected to the airline business. In Kelleher’s view, Southwest should even stay away from related travel areas, such as hotels and rental cars.

Thus, on the surface, it may appear that Google’s Page and Southwest’s Kelleher have diametrically opposed views regarding how much companies should change. But, a deeper look indicates that their views differ much less than what a cursory glance might suggest. So, although Page’s belief in big change may seem like a sharp contrast to Kelleher’s sticking only with airlines–as I see it after researching business success for over 25 years–underlying factors mitigate the distinction between the two founders’ views.

First of all, Kelleher is very industry focused. And, while Page advocates big change, he has, according to the Fortune article, more recently adopted an emphasis upon focus, which he learned from the late Steve Jobs. As I see it, Page’s shift toward greater focus has implications about his views on change. By definition, a narrower focus limits how much a company can change. A narrower focus can keep a company closer to its strengths even when making bigger changes. In this sense, focus can encourage companies to be more inclined to stick with what they know.

Furthermore, while Larry Page may be attracted to ideas deemed crazy, the corporate culture developed at Southwest under Herb Kelleher’s leadership was highly non-traditional and a book titled “Nuts” was written about the company. So, both Google’s Page and Southwest’s Kelleher have successfully pursued what might be considered an element of craziness. Yet, both succeeded because their businesses moved forward via evolutionary steps, allowing their novel approaches to work quite well.

Additionally, big change advocate Larry Page leads a high tech company and technology is an area that changes much faster than most. Thus, in technology, the essence of what you know can change rapidly. So, bigger change may be required even if you try sticking to what you know. This may be a factor in Google’s move into mobile phones. While mobile phones may seem like a far cry from search engines, Google’s Android system essentially helps block potential disruption of its flagship product by newer smart phone technology, while expanding Google’s strengths in search. To the extent that Google is building upon its search and technology strengths, Google may in some ways be sticking to what it knows with Android.

Essentially, the key to success with change is doing it in ways that builds upon prior strengths. Doing so helps blur the distinction between making big changes and sticking to what you know. Highly successful big change is generally somehow related to prior strengths, or occurs where the time involved is so long that a strength can be developed and the industry structure is such that the strength can take hold.

In a separate, but related matter, another current example of a company working toward serious change is pharmacy retailer Walgreens, which has been doing some things not typically associated with drug stores. I was quoted by business reporter Anna Marie Kukec recently in her January 7, 2013 Daily Herald Business Ledger article (which was also in the Ledger’s sister publication, The Daily Herald on January 15, 2013) about changes at Walgreens. In the article, I pointed out that many areas the drug chain is altering may seem like big changes, but do also build on past foundations and are evolutionary, thus increasing the chance of success as long as radical, out-of-the-box change is not excessive.

In summary, to succeed with what may seem like big change, companies need to tap their prior strengths and build on past foundations. I help companies do this with my Winning Moves® reports, articles, blog posts, presentations, and consulting. There are patterns behind what works and what doesn’t. Following those patterns fosters successful change. Both Google and Southwest followed these patterns, made “Winning Moves” and attained great success. Thus, Larry Page’s big change approach and Herb Kelleher’s stick to what you know can both build upon prior strengths in an evolutionary fashion that becomes highly successful.