Biting Ears and Anticipating Change

"Everyone has a plan 'til they get punched in the mouth." - Mike Tyson

It's hard to know exactly what Mike Tyson was talking about when he said that, but he probably wasn't talking about an organization's ability to adapt to unanticipated circumstances after a newly implemented strategic plan. Despite the violent imagery though, it is an apt quote considering recent corporate behavior.

Not all press is good press

High-performance organizations are 2.1x better at creating environments that are ready to meet new challenges, according to The People-Profit Chain™ from i4cp; and as one of the 25 KPIs that correlates to market performance, readiness to meet new challenges is founded on a single word: preparedness. For example, Home Depot announced a credit card security breach on Sept. 8, placing it in the ranks of Target, TJ Maxx, Neiman Marcus, and other organizations that were unprepared to handle data breaches. The fallout was extreme and Home Depot's market cap plunged by an estimated $4.3 billion in one day.

Similarly, Target provides a good example of a company that was not prepared for the financial equivalent of a "punch in the mouth." Following its data breach in December 2013, Target lost its CEO and CIO. Stories that emerged from the turmoil there bring data from the i4cp report The Secret Formula for Organizational Agility to life.

Unprepared and slow

The Wall Street Journal reported in June 2014 that Target was in cultural trouble even before the data breach was discovered, "Management became mired in a new thicket of bureaucracy. Creative leeway--once the DNA of the chain affectionately dubbed 'Tar-zhay'--took a back seat to rigid performance metrics." Further along, the article notes that, "Even small projects, like a mobile app, became bogged under the weight of giant teams. All the back-and-forth didn't jibe with a rapidly changing retail climate. Significantly, Target was slow to embrace e-commerce, which still only accounts for about 2% of sales."

The Secret Formula for Organizational Agility found that "... the ability to adapt, absorb, and respond to changes in the business environment is something high performance organizations do significantly better than low-performers, by factors of 3x, 2.5x, and 6.5x respectively." Target, at least in this case, did not "[Prioritize] processes such as environmental scanning and scenario planning."

When Tyson found himself in a tight spot, he responded by infamously biting his opponent's ear. Although it is still too early to tell how Home Depot will respond to all of the new challenges that will ripple out from the attack on its customer's financial data, we can all hope that it finds a better solution than the corporate equivalent of ear-biting. For employees and customers alike, corporations must get better at anticipating and responding to threats.

Download a preview edition of The Secret Formula for Organizational Agility.

And Mike, if you are reading this, please don't punch me in the mouth.