
Three things I know: taking over the family business
How many times did I secretly wish for my father to leave the business and leave me the sole “Queen” on board? Ten years later, I cannot imagine working without him by...
by Thomas W. Malnight, Ivy Buche Published February 22, 2022 in Brain Circuits • 2 min read
We have studied companies that stand the test of time and have discovered they share some key qualities that allow them to succeed even in rapidly changing times. These companies display what we call strategic incumbency, which refers to their ability to dynamically convert the liabilities of age, size, and tradition into key advantages of market power, trusted relationships, and deep insights. This requires a fundamental shift from a passive to an active enactment of incumbency. In a previous Brain Circuit, we looked at how to identify if your organization has become too passive. If it has, you may want to check if you are facing the biggest barrier to strategic incumbency – Inertia.
In theory, organizations are characterized as adaptive systems that evolve in response to environmental changes, threats, and opportunities. However, in practice the starting condition for most incumbents is resistance to change, entrenched legacy systems, and a stuck-in-the-past mindset.
The exercise
Ask yourself the following questions:
If the answer to any/all of these questions is yes, your organization is probably suffering from inertia. The biggest roadblock to active incumbency is costly inertia, not only in financial terms but also in terms of consuming an inordinate amount of time, human resources, and intellect. The larger and older the company, the bigger the challenge of both structural and psychological inertia.
However, we find that by proactively overcoming inertia at pace with the contextual changes, organizations can convert the very disadvantages of size and age into significant advantages of market power and trusted relationships that enable strategic incumbency.
Further reading: The Strategic Advantage of Incumbency by Thomas Malnight and Ivy Buche
Professor Emeritus of Strategy and General Management
Thomas W Malnight is Professor Emeritus of Strategy and General Management. His fields of interest are strategy, leading and accelerating transformational organizational change, and the role of purpose in redefining businesses and their impact on society.
Associate Director, Business Transformation Initiative
Ivy Buche is a Research Fellow and Term Research Professor at IMD. She works with faculty on organization transformation projects for large companies.
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