In this article writerhas touched the dilemma manager (company) faces when although being on the pathof success they face environmental change. They often fail to respond anddefend themselves against competitors armed with new innovation, strategy etc.they watch there reduced sales as temporary phenomenon and lag in taking requireddecision. It has been foundmanagers of besieged companies usually recognize the threat, carefully analyseits for their business, and takes initiative to fight against it Though, thecompanies still falter. There may be many reason for this failure one of it is ActiveInertia.
Active Inertia.: Active inertia is an organization’s tendencyto follow established patterns of behaviour—even in response to dramaticenvironmental shifts. Stuck in the modes of thinking and working that broughtsuccess in the past, market leaders simply accelerate all their tried-and-trueactivities. In trying to dig themselves out of a hole, they just deepen it. For an example and understanding Activeinertia classic case of Firestone has been used. Firestone being market leaderof tire industry in U.S. was one of the victim of active inertia.
They haveenjoyed decade of leadership in the segment and its long run success gave thecompany the uniformity in values and strategies, relationships withcustomers and employees. The company had, a clear formula for success. It hadserved it well since the turn of the century.
Then French company,Michelin, introduced the radial tire to the U.S. markets.
Radials were safer,longer-lasting, and more economical than traditional tires. They were alreadydominating in European market and when Ford declared in 1972 that all its newcars would have radials it was sure they will do the same in U.S.Although Firestone’sresponse was quick, it was far from effective. Even after investing in newproduct they followed the same way of production and working. In addition, thecompany delayed closing many of its factories that produced bias tires. Activeinertia had taken hold.
The Four Hallmarksof Active InertiaMost leading businesses owe their fresh competitiveformula—a combination of strategies, processes, relationships, and values thatsets them apart from the competitors. As this formula succeed All this positivefeedback reinforces managers’ confidence that they have found the one best way,and it emboldens them to focus their energies on refining and extending theirwinning system and it becomes rigid. The fresh thinking that led to a company’sinitial success is replaced by a rigid devotion to the status quo. And whenchanges occur in the markets, the formula instead of bringing success bringsfailure. STRATEGIC FRAMESBECOMES BLINDER Strategic frames are the the mind-sets. This ishow managers looks the world around him.
The frames becomes the answer of allthe strategy question. But while frames help managers to see, they can alsoblind them. Frame can restrict the vision of the manager and make them beliveas the frame is the only thing to be belived. In effect, frames can preventingpeople from noticing new options and opportunities.Sadly, the transformation of strategic framesinto blinders is the rule, not the exception, in most human affairs. PROCESSES HARDEN INTOROUTINES When companies decide to do certain things they look for all thealternatives available but when they find the best alternatives they stick tothe it and believe it to be the best one. Soon it becomes a process to befollowed.
People start following this process and becomes habitual to the same andvery soon they find themselves reluctant to change as it has become thereroutine to do task in the prescribed format. RELATIONSHIPSBECOMES SHACKLESIn order to succeed, every company must buildstrong relationships—with employees, customers, suppliers, lenders, andinvestors. When conditions shift, however, companies often find that theirrelationships have turned into shackles, limiting their flexibility and leadingthem into active inertia. The need to maintain existing relationships with customerscan hinder companies in developing new products or focusing on new markets. VALUES HARDEN INTODOGMAS A company’s values are the set of deeply heldbeliefs that unify and inspire its people. Values define how employees see boththemselves and their employers.
As companies mature, however, their valuesoften harden into rigid rules and regulations that have legitimacy simplybecause they’re enshrined in precedent. Like a petrifying tree, the once-livingvalues are slowly replaced by the cold stone of dogma. As this happens, thevalues no longer inspire, and their unifying power degenerates into areactionary tendency to circle the wagons in the face of threats.
The result,again, is active inertia. Renewal, Not Revolution Successful companies can avoid active inertia. Theyshould first understand their biggest enemy is not paralysis. They need torealize that action alone cannot solves anything. In fact, it often makesmatters worse. Most struggling companies have a good sense of what theyneed to do. Shackles should be removed.
Even after a company has come to understand theobstacles it faces, it should resist the impulse to rush forward. Somebusiness gurus exhort managers to change every aspect of their companiessimultaneously, to foment revolution within their organizations. The assumptionis that the old formulas need to be thrown to the wind—and the sooner, thebetter. But the veterans of change programs whom I’ve talked to argue againstthat approach. They say that by trying to change everything all at once,managers often destroy crucial competencies, tear the fabric of socialrelationships that took years to weave, and disorient customers and employeesalike. A revolution provides a shock to the system, but the shock sometimesproves fatal. Analysis Although success gives the process and path tomove on but companies and leaders should avoid to get into active inertia. Theyshould open the blind fold wrapped due to success and consider thealternatives.
Process gives you mass production but it can be copied veryeasily by competitors and the companies losses its POD. If values become aDogmas it should be considered again.