Good leaders know how to keep their organization even-keeled through disruptive change.
Effective managers perform the ultimate balancing act: finding just the right tempo between ensuring continuity and inspiring change.
Drucker stresses that both are crucial to a company’s long-term success.
Change happens when companies grow. And when companies grow, restructuring often brings with it more bureaucracy. In addition to structural changes, growth inspires greater innovation – in essence, more change! New products and new markets necessitate new branding, and so on.
Although this is a challenging, volatile period for a company, it’s also necessary for the continued health of any business. Without change, a company can stagnate, which can lead to eventual failure.
Consider the story of Henry Ford, a manager whose unwillingness to change nearly cost him his business. When Ford started his company in 1905, he had nothing. But in just 15 years, he was able to create one of the world’s largest and most profitable businesses.
Yet by 1927, Ford’s company was in financial disarray. So what happened?
Ford was deeply committed to an owner-entrepreneur style of business, a system with one big boss, many workers – and no management. He was so controlling that he would fire employees who tried to make managerial decisions or assert leadership.
But his approach stood in stark contrast to what his contemporaries were doing. At the time, other companies were using management strategy as a way of effectively handling growth.
Because Ford refused to cede any control, his company struggled for years. Ford only experienced a reversal in the company’s fortunes in 1944, when his inexperienced grandson introduced a management team.