Companies thrive by doing what they do best. Yet, as times change, companies must assess how and when to alter their previous ways in response to shifting circumstances. They need to apply an effective level of balance between what they have always done and what the business should do differently in the future.
This is not always easy and it can, in fact, be quite challenging. Companies succeed by building on their strengths. Yet, as external conditions change, and companies find they must do things differently, they might have to augment their previous strengths. But, often, this is not easy. That’s why we recommend taking an “Evolution, Not Revolution” approach when companies are pursuing new ways of doing business.
We are briefly reminded of this in the recent Wall Street Journal article “Shell in Early Talks to Buy Rival BP“ by Ben Dummett, Lauren Thomas, and Jenny Strasburg, published June 26, 2025. Although the article is primarily about possible merger talk between oil companies Shell and BP, it does offer a brief reminder of the difficulties companies can face when they choose to pursue new areas. The article says, “BP has been the laggard among major oil companies after an ill-fated push away from fossil fuels into renewable energy.”
It is beyond the scope of this blog post to analyze the oil industry and recommend what specifically BP should have done rather than put itself in an “ill-fated” situation. However, there are some general guidelines that might have helped BP avoid an “ill-fated push”.
To help avoid ill-fated endeavors, companies should not be too quick to respond to industry trends without evaluating what it takes to do so successfully. Yes, there were trends affecting the oil industry, such as climate change issues and the increasing role of alternative energy sources, like wind-generated power. But, even though oil and renewables are both energy sources, there are differences in what it takes to successfully do business in each of these sectors. Companies must recognize this if they are to avoid ill-fated losses when pursuing new areas. Just because a new line of business is in a related area, in this case energy, it doesn’t mean a company can easily pursue that new area without incurring ill-fated losses.
The lesson here is that when companies pursue new areas, they need to pay attention to how these new areas build on their prior strengths. The more different a seemingly related area is from the existing business, the more challenging its pursuit may be.
