Nicolaj Siggelkow’s paper, “Change in the Presence of Fit: The Rise, the Fall, and the Renaissance of Liz Claiborne”, though lengthy, was a fascinating read about the fashion industry. Based on Siggelkow’s concept of “Fit”, here are three essential steps to anticipate the need for change (with my own spin added):
- Look inside: Does the organization have internal fit? Do all functions work seamlessly and efficiently together? For example, do your marketing and sales teams collaborate effectively, or are there communication gaps?
- Look around: Does the organization have external fit? Do the products, services, strategy, and structure interact effectively and efficiently with customers, suppliers, competitors, government, and other environmental factors? For instance, does your product lineup align with current market demads and customer expectations?
- Look ahead: Is the current internal fit an asset for the company’s future external fit (which may differ from the current external fit)? This requires analyzing the short- and long-term risks and opportunities the organization faces. Are emerging market trends and technological advancements considered in your strategic planning?
If the answer to any of these questions is “No”, change needs to be considered. Such change could be incremental or disruptive and might involve overhauling the seemingly perfect processes and models that work today to ensure readiness for the future.