The Pioneer Mindset Deployed
Incredible Result:“In this battle of now constant, massive disruption and new horizons, our Company is built to explore new possibilities, to endure and adapt, and to profitably grow.”
Avoidable Train Wreck:A “fear of change” mindset is overtaken by today’s massive Business Model disruptions.
Main Play: The “Pioneer Mindset” Initiative
What This Is:This program, taught to your Company’s leadership and aspiring leaders, builds the Pioneer Mindset into the culture of your Company. This system of leadership recognizes that a pioneer mindset is necessary for success today. This program is designed to overcome the External and Internal Forces which destroy or hold back business growth and profitability.
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I loved the pony business, and I loved growing up on our little pony farm in Quincy, Illinois. As a young boy, I figured it would last forever. But by 1969 it was a mere shadow of itself.
And by 1971, my family’s Shoppers Village retail store had closed. My family’s Colonial Inn Restaurant wasn’t far behind, to be later followed by the closing of our Pronto Restaurant and then the S & H Greenstamp redemption store. The Niemann Bros. warehouse distribution business was shuttered by the late 1970’s, as well as our Westgate Fireworks business and later our Burger Chef Restaurant franchise. After having been in business for decades, they all seemed to have run their course.
What the heck was going on? While our family just pivoted to other opportunities, these had been great family businesses.
As I approached high school, I began to notice many other companies coming and going on the Quincy, Illinois landscape. My travels to and from college in Omaha showed me more of the same. Companies which at least appeared to be pretty successful were seemingly, all of a sudden just gone.
The Life And Death Of Companies
Corporations, of course, have a history which in the western world have been around for only about 500 years. During that time, they collectively have had huge success and have produced goods and services and created wealth which has enabled world population to explode and standards of living to soar.
However, when looked at individually, most commercial corporations have been, as Arie De Geus states in his book, The Living Company, “dramatic failures – or, at best, underachievers.” As he points out, “They develop and exploit only a fraction of their potential. For proof, you need only consider their high mortality rate.”
De Geus points out that the “average life expectancy of a multinational corporation – Fortune 500 or its equivalent – is between 40 and 50 years.” De Geus goes on to demonstrate that that figure, “short though it seems, represents the life expectancy of companies of a considerable size. These companies have already survived their first 10 years, a period of high corporate ‘infant mortality.’ In some countries, 40 percent of all newly created companies last less than 10 years.”
De Geus cites a study by the Stratix Group in Amsterdam which indicates that the average life expectancy of all firms, regardless of size, measured in Japan and much of Europe, is only 12.5 years. He says he knows “of no reason to believe that the situation in the United States is materially better.”
Indeed! According to the U.S. Small Business Administration, only 50% of new businesses survive five years. Only 33% reach 10 years and only 25% last 15 years or more.
Didn’t someone have a formula or something for avoiding what had to be heartbreak upon heartbreak to families and to their hopes and dreams?
Apparently not. And the problem isn’t just disappearing.
While this is occurring in small businesses and family businesses, we can see this in just a sampling of large well-known companies that have completely or essentially failed:
| - A & P Supermarkets | - Blockbuster Video | - Borders |
| - MySpace | - Comdisco | - Montgomery Ward |
| - TWA | - Kodak | - Bethlehem Steel |
| - Polaroid | - Woolworth | - Radio Shack |
| - Smarter Image | - Atkins Nutritionals | - Sears |
| - BlackBerry | - FAO Schwarz | - Howard Johnson's |
They all had a recognizable brand. They were all fairly large companies, most of them being publically held. In other words, these were not small start-up or middle market companies which failed to materialize.
However, what they failed to do is profitably innovate, i.e. they apparently didn’t have what it takes to effectively move when one should move. They did not have an “Always A Startup” mindset. They stuck to a static Business Model, and they all failed.
The reality is that “Business Models are living much shorter lives these days.” (Fortune Magazine, October 2, 2006).
As Saul Kaplan, author of The Business Model Innovation Factory has observed: “Business Models just don’t last as long as they used to.” Kaplan goes on to say: “During the industrial era, Business Models rarely changed and were handed down from generation to generation. … Those days are over. The industrial era is not coming back.”
Many other organizations self-destruct not due to static Business Models but due to organization cultures and leadership which enable, condone or promote greed, corruption, fraud, poor management or other questionable or nondesirable conditions or practices which develop improper Business Models or which destroy otherwise good Business Models.
Well known examples include:
| - Arthur Andersen | - Enron | - E.F. Hutton |
| - MCI Worldcom | - Bear Stearns | - TWA |
| - Standard Oil | - Adelphia | - Drexel Burnham |
Are organizations (and the Business Models and cultures on which they are based) simply perishable? Are almost all organizations (whether large or small), in the words of De Geus, destined to be “underachievers”?
“I’m Ok. You’re Not”
“What does it matter? Our Company is ok. It’s the other person’s Company or sector we are talking about. Right? I’m ok. You’re not.”
Therein lies the problem and the start of what I call the “Business Model Myth”. This problem is overcome by having a Pioneer Mindset. In the now constant disruptive conditions we are in, the likelihood of surviving without a Pioneer Mindset will be very slim.
The Business Model Myth
Will the probable, almost certain, future outcome of the present course of your Company be that of lasting success? The Business Model Myth is the unwarranted belief that your Business Model will, through natural market forces, evolve on its own to replicate (or improve) today’s outcome indefinitely. Many either believe it or at least act as if it is truth.
The reality is just the opposite. A mindshift is needed. Without a proactive, creative hand, a Company’s Business Model, the leadership which supports it, and the culture which fuels it, will mutate and disintegrate into an unrecognizable, unprofitable organization which will linger or perish. The only question is how soon and who will it take down with it.
As Forbes Magazine has found, it’s “up to each of us as leaders to build a culture that inspires innovative brilliance in our own teams and organizations.” (“Why A Startup Mentality Is Key To Your Success.” January 28, 2016).
The belief that your Company’s past success and endurance is proof that your Company will endure into the future has become foolhardy.
The Business Model Myth is believing everything is fine. Never is everything fine. It is believing your present Business Model will last. Never will any Business Model last. It is believing your Business Model will profitably evolve on its own. It won’t. It is believing you can go it alone. You can’t do it alone.
The seven hidden, destructive internal forces which infect the culture of many companies are destroying or holding back companies and the financial freedom of the families, leaders and owners who depend on them.
All business leaders (and those they lead) run the risk of believing that their Business Model will continue to perform as well for them as it has in the past. The fact that most believe this is proven by the following fact. Most business leaders devote substantial time and resources to product research, development and testing. Yet most devote little time or resources to Business Model research, development and testing. This is now changing – due to the Business Model Generation (discussed below).
Sudden Impact - The 4 Relentless External Forces
However, just as products and services have a limited life, so too do Business Models. Every Business Model has four epicenters which center around our Resources, our Offers, our Customers and our Finances:
We all face the impact of four Relentless External Forces on these four Business Model Epicenters – which will have a positive or negative impact on your business, depending on the culture and leadership of your Company. These are the following:
- Offer Forces – These are the external forces which impact the nature and efficacy of the products, ser- vices and experiences which we offer. These forces include technology, insurgents, competitors and the needs and wants of those who we serve.
- Customer Forces – These are the external forces which impact our existing and potential future custom- ers. These forces include society, demographics, products/services and customer makeup.
- Resource Forces – These are the external forces which impact the availability and pricing of the re- sources necessary for our business. These forces include value chain, infrastructure, assets and trans- formative issues.
- Finance Forces – These are the external forces which impact our revenue and cost systems. These forc- es include regulatory actions, market changes, price points and capital supply.
This absolutely necessitates the need for continual research, development and testing into revised and new Business Model designs for our organizations. This is true, at least, if you intend to drive an organization which has the promise of being optimally profitable and optimally durable.
While many business leaders are fortunate to see some accidental, profitable Business Model micro- evolution occurring (e.g. in response to random personnel, customer or supplier suggestions), those organizations which have endured long term have realized that intentional, creative Business Model design, and a leadership core that is on the move and a positive culture to enable it, to support it and to fuel it, are necessary if an organization is to stay highly profitable now and is to endure over the long haul. In short, to endure, an “Always A Startup” Mindset is vital.
Overcoming The 4 Relentless External Forces With The Pioneer Mindset
While most organizations let themselves succumb to a life well short of their potential, many have navigated these Relentless External Forces, and overcome the internal opposition, to successfully change or move from one Business Model to others. Let’s look at just two examples – one a very old Company and another relatively new.
Hudson’s Bay Company (HBC), founded in 1670, is North America’s longest continually operated Company. Beginning as a fur trading company it diversified or transformed its Business Model over the many years into liquor, canned salmon, coffee, tea, tobacco, real estate, shipping and natural resources. Today it focuses principally on retail, operating Hudson’s Bay, Canada’s largest department store, and Home Outfitters, Canada’s largest home specialty superstore.
This need to be able to intentionally adjust or move to new Business Models has not been lost on Jeff Bezos of Amazon. Since its beginning in 1995, Amazon has fundamentally changed its Business Model several times. It was initially set up as a “sell all, carry few” Business Model, relying on the fulfillment capabilities of many book wholesalers and publishers. Through its drop-shipping model, it could offer over a million books while stocking only about 2,000. However, as online retailing matured, Amazon couldn’t rely just on its vast product selection, as other Internet retailers began to also offer a wide array of stockless products through various drop-shipping models.
These Relentless External Forces led Amazon to move to a “sell all, carry more” Business Model, for which it greatly expanded its own warehouse fulfillment capabilities, with a focus on quick, efficient and excellent delivery. In 2006, it further reinvented its Business Model by beginning the Fulfillment by Amazon program, enabling independent sellers to use Amazon’s warehouse network to fill their orders. Through its fulfillment-for-hire Business Model, Amazon’s key value proposition and competitive strength became fulfillment, the very task it had outsourced in its early years. And on and on it goes for Amazon.
In both of these examples, had these companies been hampered by the internal human forces which destroy the ability to properly change, their Company culture would not have come up with, much less enabled, these necessary shifts, adjustments and transformations to their Business Models to have occurred in response to the four Relentless External Forces.
Again, the insights of Arie De Geus are instructive: “Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations’ true nature is that of a community of humans. The legal establishment, business educators, and the financial community all join them in this mistake.”
In other words, a focus by the organization’s leaders simply on executing your Business Model is not sufficient to sustain an organization. The uniquely human community aspect of culture must be an ingredient (which we call your Root Force Culture) in a viable formula which seeks, finds and implements Business Model change.
The Pioneer Success Formula
Based on my experience and research with hundreds of organizations throughout the world, we can achieve lasting success for any organization through the three ingredients (discussed in the next chapters) in the following formula:
The Pioneer Success Formula
[ Business Model Command ] + [ Dynamic Leadership Core ] + [ Root Force Culture] = [ Lasting Success]
Critical to the success is the presence of all three of these ingredients. For example, the best Business Model Command combined with a great Culture may survive for a short while, but it will fail to endure without a strong Leadership Core. Likewise, a great Leadership Core and a great Culture will fail if the Business Model Command doesn’t work.
This Formula for overcoming the Business Model Myth and the Relentless External Forces and for achieving lasting success is the right mix of the ingredients needed to assure that we live up to our responsibilities to each other to create the jobs and to keep our business growing, which will support our families, our colleagues, our customers and our communities.
The “Pioneer Mindset” Initiative
Fast paced disruption is the common denominator today. Innovation displaces existing companies, Business Models, products, services and ideas. Those business owners who endure are those who are always seeking to be a disruptor rather than being disrupted.
They always have a startup mindset and always begin with the end in mind.
They begin with their “Fourth Quarter” First. And, just like America’s pioneers before them, they are going for it – and winning big!
This is exactly the mindset of the startup Company. You seek change. You seek innovation. You seek discomfort. You seek new. You seek different. You seek new ways to collaborate. You seek breaks from the past. You are not bound by preconceived notions or past methods. You focus on what customers and potential customers want or need or might need. You look to disrupt others. You have the constant attitude of an insurgent. You have a belief that much that is new and untested is entirely possible. You don’t fear failure – you seek to learn from it.
This, of course, is easier said than done. However, unless your leadership team is willing to plant and water and nourish and grow the seeds of this startup mindset throughout your culture, the odds are you’ll never reach the level of First, Second, Third and Fourth Quarter success and endurance you and your colleagues and your family are seeking.
John Maxwell has been voted by Inc. Magazine as the #1 leadership and management expert in the world. Such well known leadership experts also ranked by Inc. Magazine were Jack Welch (#3), Dale Carnegie (#7), Richard Branson (#9), Michael Porter (#10), Tom Peters (#12), Stephen R. Covey (#13), Brian Tracy (#25), Peter Drucker (#29), and Jim Collins (#48).
Based on my study directly with John Maxwell and earning his leadership certification as a John Maxwell Certified Speaker and Coach, we have developed the Pioneer Mindset Initiative Program which we are deploying with Business Pioneers (and their teams) for building a leadership team and for considering and developing potential successors. This enables us to work closely with business owners in considering the important decision on who should be the owner’s successor, as well as how to further develop their successor’s leadership skills.
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