Change is hard. Several years ago a division of one of the world’s leading telecommunications companies was evaluating a new product opportunity – something that was quite unlike anything that was then available and that had the potential to take the division into an entirely new market. The prototypes were impressive and, although no one was sure exactly who would use the new gizmo, most people in the organization were deeply enthusiastic about its future. Sales of the division’s traditional products were declining, and there were rumours that the entire business would be shut down if it didn’t come up with something new. An outside consultant was brought in to evaluate the idea, and recommended wholeheartedly that the new product be launched. The division’s general manager, however, decided against making the investment. In explaining his decision he said:
I see. You’re suggesting that we invest millions of dollars in a market that may or may not exist but that is certainly smaller than our existing market, to develop a product that customers may or may not want, using a business model that will almost certainly give us lower margins than our existing product lines. You’re warning us that we’ll run into serious organizational problems as we make this investment, and our current business is screaming for resources. Tell me again just why we should do this?