Importance of adapting and evolving in business

In the ever-shifting landscape of business, one truth reigns supreme: change is inevitable. From the tides of technological advancements to the ripples of shifting customer demands, organisations must navigate the tumultuous waters to adaptation or risk being swept away by the current obsolescence. Yet, despite the undeniable need for change, so many still resist its embrace. In our last blog, we delved deep into the enigmatic realms of human psychology, unravel the intricate web of biological influences, and shed light on the powerful role social factors play in shaping our decisions. So, what actually triggers the turning point when individuals and businesses finally surrender to the winds of transformation? 

In this blog, we embark on a thought-provoking journey into the realm of change. Building upon the previous discussion, explore what specific theories exist regarding the triggers of change. Then, we will examine the detrimental impact resisting change can have on organisations. 

Triggers of change 

The threshold model suggests that people have a threshold or tipping point that determines when they decide to make a change. This model proposes that individuals accumulate dissatisfaction or discomfort until it reaches a critical threshold, prompting them to act. The threshold represents the point at which the pain or dissatisfaction of staying the same becomes greater than the anticipated pain or effort required to change. A study published in the Journal of Personality and Social Psychology found that individuals who perceived a larger discrepancy between their current state and a desired future state were more likely to act and make a change.  

Similarly, the loss aversion and risk perception theory suggest that individuals strongly prefer avoiding losses rather than acquiring equivalent gains. Risk perception plays a role in decision-making, as people weigh the potential losses and gains associated with a change. As discussed in our last blog, people are more motivated to make a change when they perceive the potential losses of maintaining the status quo as greater than the potential losses of making a change. Studies have supported this, showing that individuals are more likely to act and make a change when they perceive potential losses associated with inaction as significant. 

Finally, some believe that it is social influences and normative pressure that trigger change. This refers to the impact of others’ opinions, expectations, and behaviours on decision-making. People are influenced by what they perceive as the norm or what others are doing in similar situations. This is highlighted by many organisations only choosing to adopt changes after their competitors have. When individuals observe others making a change or perceive a shift in the social norm favouring change, they are more likely to follow suit and make their own change. Studies on social conformity, such as those conducted by Solomon Asch, have shown that individuals are influenced by the actions and opinions of others, which can impact their decision-making.  

 Now we’ve understood what actually triggers change, let’s look at the detrimental impact of being change-resistant. 

Missed Opportunities and Competitive Disadvantages  

Delaying change can lead to missed opportunities for growth, innovation, and staying ahead of competitors, resulting in a minimised competitive disadvantage. In a rapidly evolving business landscape, organisations that fail to adapt and seize opportunities may fall behind their competitors and struggle to regain lost ground. A study published in the Strategic Management Journal found that organisations that were slow to adapt to technological changes experienced lower financial performance and market value. This is especially true in the globalised business world as there are so many more organisations to compete with. McKinsey & Company found that companies who embraced change early were more likely to achieve sustained growth and outperform their industry peers. Clearly, there is a bi-directional relationship between resistance to change and financial performance. Looking at Kodak illustrates this. The organisation was once a dominant player in the photography industry, but it delayed fully embracing digital photography despite inventing the first digital camera. This delay allowed competitors to catch up and overtake them, gaining a competitive advantage, and Kodak eventually faced significant financial challenges. 

Decline in Employee Morale & Engagement 

Delaying change, especially change that would improve employees’ lives, can lead to frustration, uncertainty, and decreased employee morale and engagement. Employees thrive in environments that encourage growth, innovation, and adaptation. When change is delayed, it can create a sense of stagnation, demotivation, and disengagement among employees. A study published in the Journal of Organisational Change Management found that prolonged periods of change avoidance or delay can lead to lower employee job satisfaction and commitment. Moreover, this is supported by evidence that employee who perceive their organisations as change-resistant experienced lower levels of engagement and higher turnover intentions. For example, Blockbuster faced employee dissatisfaction and low morale due to their resistance to change. Resultantly, talented employees sought opportunities in more innovative and adaptable companies. 

Loss of Customer Trust & Loyalty  

Delaying change can erode customer trust and loyalty, leading to declining market share and customer retention. Just because one organisation is resisting change does not mean its competitors are, and when another organisation is offering better quality, price or increased convenience to customers, it’s likely they’ll win their business. Customers value organisations that meet their evolving needs and expectations. When companies fail to adapt and address changing customer preferences, trust can be compromised, resulting in customer attrition. A study found that delays in product innovation and adaption negatively affected customer satisfaction and loyalty. It’s unsurprising then that research published in the Journal of Retailing showed that customers’ perceptions of organisational change capability positively influenced their trust and loyalty toward the company. For example, BlackBerry’s failure to adopt touchscreen technology at the same pace as competitors like Apple and Android led to a decline in customer trust and loyalty.  

Inability to Attract and Retain Talent 

Resisting change can hinder an organisation’s ability to attract and retain top talent, leading to a lack of skilled and motivated employees. In a fast-paced and dynamic business environment, talented individuals are often drawn to organisations that embrace innovation, growth and continuous improvement. Resisting change can signal a lack of adaptability and hinder an organisation’s ability to attract and retain the best employees. A study published in the Journal of Occupational and Organisational Psychology found that organisations perceived as change-resistant had difficulty attracting high-performing employees. Given the current socioeconomic situation and the UK’s labour market, attracting and especially retaining talent has never been so important. Yahoo, for instance, a once prominent internet company, faced challenges in attracting and retaining top talent due to its resistance to change and slow response to emerging trends. This impacted their ability to compete effectively in the industry.  

In the realm of business, change is not merely an option but an imperative for survival and growth. Through examining the triggers that led to change, we can understand more about our own decision-making process, helping to make rational, data-driven decisions as opposed to fear driven indecision. Moreover, we have discussed the consequences of delaying change, from missed opportunities to high employee and customer attrition. One thing is for sure: Organisations that fail to embrace change risk being left behind and losing their edge in an ever-evolving marketplace.  

As business leaders and professionals, we have the power to shape the course of change and guide our organisations towards a more prosperous future. Together, let us seize the opportunities that change brings, harnessing its potential to drive us towards excellence and create a legacy of success. 

As Bear Grylls once said, ‘improve, adapt, overcome.’ 

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