In tires. Active inertia had taken hold. The Four

In this article writer
has touched the dilemma manager (company) faces when although being on the path
of success they face environmental change. They often fail to respond and
defend themselves against competitors armed with new innovation, strategy etc.
they watch there reduced sales as temporary phenomenon and lag in taking required
decision. 

 

It has been found
managers of besieged companies usually recognize the threat, carefully analyse
its for their business, and takes initiative to fight against it Though, the
companies still falter. There may be many reason for this failure one of it is Active
Inertia.

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Active Inertia.: Active inertia is an organization’s tendency
to follow established patterns of behaviour—even in response to dramatic
environmental shifts. Stuck in the modes of thinking and working that brought
success in the past, market leaders simply accelerate all their tried-and-true
activities. In trying to dig themselves out of a hole, they just deepen it.

 For an example and understanding Active
inertia classic case of Firestone has been used. Firestone being market leader
of tire industry in U.S. was one of the victim of active inertia. They have
enjoyed decade of leadership in the segment and its long run success gave the
company the uniformity in values and strategies, relationships with
customers and employees. The company had, a clear formula for success. It had
served 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 already
dominating in European market and when Ford declared in 1972 that all its new
cars would have radials it was sure they will do the same in U.S.

Although Firestone’s
response was quick, it was far from effective. Even after investing in new
product they followed the same way of production and working. In addition, the
company delayed closing many of its factories that produced bias tires. Active
inertia had taken hold.

The Four Hallmarks
of Active Inertia

Most leading businesses owe their fresh competitive
formula—a combination of strategies, processes, relationships, and values that
sets them apart from the competitors. As this formula succeed All this positive
feedback reinforces managers’ confidence that they have found the one best way,
and it emboldens them to focus their energies on refining and extending their
winning system and it becomes rigid. The fresh thinking that led to a company’s
initial success is replaced by a rigid devotion to the status quo. And when
changes occur in the markets, the formula instead of bringing success brings
failure.

 

 

STRATEGIC FRAMES
BECOMES BLINDER

 

Strategic frames are the the mind-sets. This is
how managers looks the world around him.The frames becomes the answer of all
the strategy question. But while frames help managers to see, they can also
blind them. Frame can restrict the vision of the manager and make them belive
as the frame is the only thing to be belived. In effect, frames can preventing
people from noticing new options and opportunities.

Sadly, the transformation of strategic frames
into blinders is the rule, not the exception, in most human affairs.

 

PROCESSES HARDEN INTO
ROUTINES

 

When companies decide to do certain things they look for all the
alternatives available but when they find the best alternatives they stick to
the it and believe it to be the best one. Soon it becomes a process to be
followed. People start following this process and becomes habitual to the same and
very soon they find themselves reluctant to change as it has become there
routine to do task in the prescribed format.

 

RELATIONSHIPS
BECOMES SHACKLES

In order to succeed, every company must build
strong relationships—with employees, customers, suppliers, lenders, and
investors. When conditions shift, however, companies often find that their
relationships have turned into shackles, limiting their flexibility and leading
them into active inertia. The need to maintain existing relationships with customers
can hinder companies in developing new products or focusing on new markets.

 

VALUES HARDEN INTO
DOGMAS

 

A company’s values are the set of deeply held
beliefs that unify and inspire its people. Values define how employees see both
themselves and their employers. As companies mature, however, their values
often harden into rigid rules and regulations that have legitimacy simply
because they’re enshrined in precedent. Like a petrifying tree, the once-living
values are slowly replaced by the cold stone of dogma. As this happens, the
values no longer inspire, and their unifying power degenerates into a
reactionary 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. They
should first understand their biggest enemy is not paralysis. They need to
realize that action alone cannot solves anything. In fact, it often makes
matters worse. Most struggling companies have a good sense of what they
need to do. Shackles should be removed.

 

Even after a company has come to understand the
obstacles it faces, it should resist the impulse to rush forward. Some
business gurus exhort managers to change every aspect of their companies
simultaneously, to foment revolution within their organizations. The assumption
is that the old formulas need to be thrown to the wind—and the sooner, the
better. But the veterans of change programs whom I’ve talked to argue against
that approach. They say that by trying to change everything all at once,
managers often destroy crucial competencies, tear the fabric of social
relationships that took years to weave, and disorient customers and employees
alike. A revolution provides a shock to the system, but the shock sometimes
proves fatal.

 

Analysis

 

Although success gives the process and path to
move on but companies and leaders should avoid to get into active inertia. They
should open the blind fold wrapped due to success and consider the
alternatives. Process gives you mass production but it can be copied very
easily by competitors and the companies losses its POD. If values become a
Dogmas it should be considered again.