3 Reasons Why Businesses Fail to Adapt (And How to Get it Right)

Recent times have stress-tested our resilience, our ability to cope with uncertainty and our aversion to change. Is adaptability the key to weathering any storm? And if so, why do so many businesses fail to adapt?

In the animal kingdom, survival of the fittest isn’t necessarily about being the best in the game, it’s about being the quickest to acclimatise. As Darwin quipped: “It is not the strongest of the species that survives, nor the most intelligent, it is the one that is most adaptable to change”.

And yet, in the world of business, we find change scary. It signals uncertainty. It gives us the space to fail. We are comfortable in our bubbles to move slowly, or in some cases, stand still, despite knowing deep down that it could write us off the map. We’ve seen it happen. Large-scale, heritage brands have fizzled out because they simply did not change with the tech tide.

Former movie provider Blockbuster, for example, employed 84,000 people in its peak, but the rise of Netflix’s streaming model trimmed Blockbuster’s presence down to just one physical store. 

In 2006, more people visited MySpace than they visited Google, but while MySpace was primarily connecting people over music, Facebook entered the scene with a neater user experience and a longer list of interests to unite people.

As the world of work evolves, how can you stay competitive?

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How adaptable are today’s businesses?

Writing in Forbes, Customer Experience Futurist Blake Morgan reveals our stubbornness on the topic. 55% of startups have adopted a digital business strategy, but only 38% of traditional companies have.

In fact, only 27% of companies believe digital transformation to be a matter of survival. Despite the demise of heritage brands, businesses are still unconvinced they need to adapt to the changing world. 

And yet, 56% of CEOs say digital improvements have led to increased revenue. The data doesn’t add up – we know technology is valuable – if not imperative – so why aren’t we entering the race?

Perhaps it’s because 70% of digital transformations fail, most often due to resistance from employees, which sheds a light on something more serious: digital transformations aren’t just about buying new tech stacks – they’re about teaching employees how to leverage them.

Businesses fail to adapt because they don’t invest in a learning culture

Nothing stifles growth more than the fear of failure. Businesses know this on some level – which is why new tech stacks often arrive with a series of training sessions alongside them.

But as quoted in the Harvard Business Review: “[Training programs] worked well in an era when the pace of technological change was relatively slow. But advances are happening so quickly and with such complexity today that companies need to shift to a continuous-learning model”.

This learning culture should also teach skills beyond ‘how to use the new tech stack’ – it should embrace teaching soft skills such as resilience, curiosity and adaptability itself.

Research by Barclays LifeSkills highlights that while 60% of companies believe adaptability has become more important in the last ten years, only 8% of companies offer specific training on it.

According to Shaun Thomson, CEO at Sandler Training: “Adaptability boils down to employees that have been empowered…Managers have to be trained to give permission to employees to make decisions, including the permission to fail”.

At Salesforce, for example, employees are trusted to make their own decisions. Considering the pace of the software company’s growth, teams have to be able to keep up – and that requires a culture of trust that inspires them to rely on their own judgement.

Chris Ciauri, Salesforce’s former Executive Vice President and European General Manager explained: “I believe people learn to be adaptable through experience and that comes from a culture that encourages change. It's my role to make sure that the leaders and their teams know that they have permission to be agile and make decisions that are right for our customers in response to changes”.

Affecting this kind of culture shift can take time – and it has to start at the top. As we detailed in our blog, “The 9 Elements of Strategic Leadership”, it involves being brave enough to fail, building teams that gel together, remaining endlessly curious and finding the right balance between presence and absence.

Businesses fail to adapt because they put processes before people

Technology may wield impressive results, but its power is nullified if employees don’t want to adapt to new ways of working. According to TED speaker Natalie Fratto, this human quality of adaptability is what sets apart those who go on to achieve from those who don’t.

On average, Fratto meets with hundreds of startup founders a year to assess whether she wants to invest in their business ideas. In a deciding yet brief conversation, she looks to gauge each founder’s adaptability powers.

While most interview questions are retrospective and competency-based, such as: “Can you think of a time when you showed leadership?”, Fratto asks “What if?” questions to force founders to picture multiple versions of the future, and plan accordingly. 

These include, “What if your main revenue stream were to dry up overnight?”, or “What if a heatwave prevented customers from visiting your store?”.

She says another sign of adaptability is our tendency to unlearn: “Active unlearners seek to challenge what they presume to already know and instead override that data with new information”, citing an example of a man who rewired his bike to turn right when he turned left, and left when he turned right. Reassuringly, it took him eight months to master.

For those apprehensive about their team’s existing adaptability powers, Fratto believes everyone has the innate capability to react to change differently, but she says: “We have to seek it out, exercise it and flex it like a muscle”.

To strengthen you and your team’s adaptability, she recommends writing down the times you were wrong or changed your mind, playing devil’s advocate and experimenting with new projects – all of which will help you stay agile in your approach to change.

Businesses fail to adapt because they doubt the agility of their workforce

A 2018 study cited in The Harvard Business Review investigated who was more open to change: workers or their business leaders. After speaking to 11,000 workers and 6,500 business leaders, it was apparent that the two groups viewed the future in very different ways.

Overall, the research found that “workers seem to be more adaptive and optimistic about the future than their leaders recognise”.

Business leaders are anxious and “struggle to marshal and mobilise the workforce of tomorrow”. They worry about finding the right talent and they worry about the skills of their existing talent becoming obsolete.

Workers, on the other hand, focused on “the opportunities and benefits that the future holds for them, and they revealed themselves to be much more eager to embrace change and learn new skills than their employers gave them credit for”.

When faced with change, have faith in your workforce’s ability to weather the ups and downs of a competitive economy – it will serve you and your business well. Lean on others, find comfort in not knowing all the answers, and embrace a curiosity that not only accepts, but invites the lessons of failure.