In 2020, there are a lot of potential threats to even the most successful businesses. When you look around, you might feel threatened by your competitors, new startups disrupting your space, your access to working capital, or the economic uncertainty hanging over us.

But after more than 30 years in business, we have learned that none of those factors are your biggest threat. Instead, there’s something else, strong and fierce, invisible and lurking. The biggest enemy to your business is the momentum of the status quo.

We have seen this issue play out over and over. The status quo is powerful. It’s exceedingly comfortable, and so people get stuck in myopic thinking. They resist change. They stick to what’s worked in the past. And as a result, they drive sub-optimal performance that can prove fatal to the business.

Learn from the Past

Just this week, we’ve nudged clients out of status-quo thinking. We’ve argued that working from a place of comfort will inhibit growth and may cost them customers.

Here’s what we tell them: the history of business is lined with the gravestones of businesses that failed to understand the insidious force of the status quo. We can learn from rock-solid companies of the past that succumbed to this dangerous dynamic. In our world of the tech industry, companies such as Digital Equipment, Compaq, Tandem, and Gateway all stayed their course, failed to evolve, and now no longer exist.

Examine the Allure of the Status Quo

If we know the status quo is net negative for business, why do we cling to it? Understanding the allure of the status quo will help us fight against it.

The reasons companies stick to the status quo are relatable:

• It’s easy.

• It’s comfortable.

• It reflects how we were trained. 

• Our employees and teams advocate for it.

• We understand the economics of it, so the risk is minimal.

• Most people don’t speak out against it.

• We might have an influential or loud leader who actively resists change.

How to Know if You’re Stuck in the Status Quo

The problem with the status quo, or “business-as-usual,” is that it’s so comfortable and neutral that we often don't hear loud alarm bells. Everything’s fine. 

So how do you know if it’s time to push for a change?

• Your competitors are changing. (There’s your alarm bell.)

• Your customers are changing.

• Your business is under-performing, or results are starting to stagnate.

• Your employees are bored, under-performing, or under-engaged.

How to Challenge the Status Quo Successfully

If you’re ready to shake things up, consider a few tools to help you argue your case internally.

• Get a key influencer on your side. Look for people who are well-liked and respected can influence decision-makers. Influencers can be the key you need to successfully change the minds of executives.

• Bring in a third party. Often, we need an outsider’s perspective to fully understand how stuck we are in the status quo, and to point out new directions we could take. 

• Identify resistance points. Is there a leader who won’t budge? Who has gotten so comfortable that they’re advocating against change? Spot them early on so that you can talk to them, understand their resistance, and help them see the danger of their status-quo position.

• Call out the status quo. Sometimes, we don’t realize that our subconscious is resisting change. We need help calling it out and considering different ways of thinking. Get explicit to help everyone see the status quo and consider ways to move past it.

A Tale of Two Companies

We’ll leave you with a tale of two companies — one that succumbed to the status quo, and one that changed course.

Compaq

In the late 1980s, Compaq established itself quickly as the darling of the tech industry with solid products at reasonable prices. Their go-to-market strategy was a traditional two-tier distribution model, with a supply chain through a handful of jumbo distributors and thousands of local VARs. 

Business was great and they had the dominant market share. But along came Michael Dell, with similar products and a direct-to-user model that eliminated both distributors and local VARs. Not only was the direct-to-user model resonating, but the economic model was far superior. 

Compaq knew they had to aggressively rethink their supply chain cost model, or be priced out of the market. While they knew they had to change, they were unable to, as quarterly Wall Street commitments drove them back to the unsustainable status quo. Middle management convinced executive management that they could “sell their way” out of the problem without changing the existing model or pricing structure. 

They stuck with the status quo, lost money, lost share, lost valuation, and were forced to sell the company at a discount to Hewlett Packard.

CDW

But there’s a different path. Let’s look at CDW (originally Computer Discount Warehouse). The company was a Chicago phenomenon that went from zero to $1 billion in revenue in just a few years. The founder, employees, and shareowners were thrilled and the future appeared bright. 

But as they topped a billion dollars, CDW’s founder knew he had to start attacking the status quo in multiple areas. One area to challenge was his own leadership skills. He thought long and hard about his ability to continue to drive the exponential growth the company had experienced. 

He made a shocking decision to change the status quo. He concluded that he was a true entrepreneur — someone who was great at starting things. He realized that he had maxed out  his core strengths, and he wasn’t the best person to lead the company forward. 

He stepped down as CEO, turning the business over to a professional and experienced mega-company CEO who had been running United Airlines. The results were phenomenal with the company soaring past the $10 billion mark.

These examples are from past, but falling into a status quo trap is still a very modern, ever-present danger.

Which tale do you want people to tell about you? We never think we are going to be the one to succumb to the failure of the status quo. But it takes vigilance, humility, and a curiosity about what’s next in order to fight it off.

We often need an outside perspective to identify status-quo thinking and push us towards new opportunities. If you’d like help staying ahead of the status quo, schedule a Business X-Ray with Gilroy Associates.