"Change has a considerable psychological impact on the human mind. To the fearful it is threatening because it means that things may get worse. To the hopeful it is encouraging because things may get better. To the confident it is inspiring because the challenge exists to make things better."

King Whitney Jr.

What is happening within your family, your organisation or your country is more important than what is happening around it in determining its success.

When we focus on creating organisational success, especially through strategy, we often focus on competition, customers and markets – primarily on our external environment (though often anecdotally). This view is important, but not as crucial as having a clear internal perspective for creating success – what you do has a greater impact on your company’s success than what your competitor does.

Leadership is about people and what they do, either in anticipation of or in response to factors, trends and events that they cannot change. A year ago, which of you would have predicted oil reaching US$120 per barrel, the credit crisis in the US or the World Bank talking about a global food crisis?

So, in this series of articles, I would like to discuss the real challenges to the success of our organisations and institutions – and ultimately the success of our countries and our individual success.

The series starts with our most critical challenge - the true recognition of change.

Change

The world is in a perpetual state of change. Change that will affect our organisations; our countries and our region. Change that will affect each and every one of us. Sometimes the change is sudden, dramatic and far-reaching, as with the impact of September 11. Sometimes it is slower, but no less far-reaching – like the growth of the Internet. Other times it is almost unobserved and often misunderstood – like the fundamental changes affecting the change from an industrial to an information economy.

Change always causes disruption. Change always causes stress. Change is often difficult. And we are always in the midst of change. Many companies are undergoing fundamental changes to their business models, in a rapidly changing business environment. There are mergers and alliances, shifts in strategic direction, operational improvement, branding and rebranding, new theories of business and organisational change.

Change represents a major competitive force – having a deep influence on the growth and direction - and long term success - of every organisation. Companies that are blind to change are doomed to failure – we cannot afford to stay in the same place, irrespective of how successful we are currently.

Business history is replete with examples of companies that did not recognise or understand change in their markets. The corporate graveyard is littered with their corpses. Which of you remember Pollypeck, Amstrad, Fairchild or Burroughs? In ten years, who will remember Enron or even Compaq?

To be successful we must recognise that the very nature of our industries is changing – all the time. In insurance, it is from insurance to financial services; from traditional life insurance to a full suite of insurance and financial products and services; from agents to multi-channel distribution; from being a strong local competitor to being able to compete with the global companies.

More than an understanding of what is changing is the recognition that what is happening around us and within us will always be changing. We claim to appreciate the cliché “the only constant is change”. So why then have we created organisations, institutions, systems, processes and approaches that run counter to the very idea of continuous change? Why do we continue to do so?

For example, our very approach to creating the strategy to guide our companies assumes that we are looking at a world of constancy. We can take a slice of our world to develop a set of strategies to last three or five or more years. In the interim, we tinker with our strategic plans at our annual two or three day retreat - before we bring in the next set of consultants or facilitators to look at the world again and develop a new strategy.

Very few companies have a process for strategy – even fewer have a process for strategy that connects to our day-to-day work – and almost none have a process that is dynamic and continuous and which can be informed by the real world learning contained in that day to day work.

The late Peter Drucker, the acknowledged leading management thinker of the 20th Century said that: “Every organization must be prepared to abandon everything it does to survive in the future”.

Yet, who is willing to and which of us actually does?

Indeed, the current challenges we face in terms of economic and social crisis – for I fear it is no less – will demonstrate our unwillingness to change our worldview and therefore our approaches as governments, businesses and individuals. (It is clear that we have no process for dealing with such change – as we are always surprised). It is already too late to be proactive but it is not too late to act. And we must act – all of us because government alone nor business alone can do it.

But history suggests that we will not change. Instead, we will wait for the world to go back to “normal”. We will not recognise that the current events are creating the “New Normal”. We will see the need to change only after the physical pain is greater than the mental comfort of doing nothing. And then the remedies will be as bad as malady.

Perhaps we will remain assured in this fact – we are all in the same boat!!!

Unfortunately, it may be sinking. Fast.