Warren Buffett’s sale of $900 million worth of Walmart stock, a move that could signal “the death of retail sales as we know it” according to the Business Insider headline, got me thinking about CHANGE vs. TRANSFORMATION.
Bold predictions aside, what I found interesting was the comparison between Walmart and Amazon. Walmart can’t compete with Amazon in the world of e-commerce, and it may never catch up to Amazon’s online sales no matter how much money it pumps into it now.
I believe that’s because Walmart was focused on CHANGE rather than TRANSFORMATION at a critical moment. Because of that, it missed a great opportunity at the emergence of e-commerce.
Although CHANGE and TRANSFORMATION are often used to mean pretty much the same thing, I like to differentiate between these two words. Both refer to a difference in a person or thing from one point in time to another, but they have very different connotations.
CHANGE looks to the past.
When we decide to change – ourselves, our circumstances, our companies – we often look to see where we can make improvements. This can go faster. This can be cheaper. This can be better.
Faster. Cheaper. Better. Louder, softer, fatter, thinner, whatever we want it to be, it’s an –er. That means we’re automatically envisioning the thing we want as compared to something that already exists. For that reason, CHANGE is necessarily backward-looking; it’s concerned with the past.
Looking to the past isn’t a bad thing in and of itself. It’s important to know where you’ve been and where you are; however, there’s a limit to –er. At some point, you can’t streamline or optimize or cut anymore, and you’ve reached a place you can’t get past.
This focus on the past can also mean missing out on the future. When we’re so consumed with finding the way to sell the cheapest widget, we miss the message that no one wants widgets anymore and that we’re going to have to pivot to thrive in the new marketplace.
That’s where TRANSFORMATION comes in.
TRANSFORMATION looks to the future.
TRANSFORMATION is not concerned with comparing present and future efforts with those of the past. Instead, TRANSFORMATION is centered around the idea that if we design the future we want, we will then create the ways to make it happen.
This is exactly what happened when President Kennedy boldly declared in 1962 that the U.S.A. would be the first nation to put a man on the moon, when the realization of that dream seemed impossibly far off. But he declared it, he had TRUST IN THE UNIVERSE (another powerful PRIME), and just seven years later, a proud nation achieved that visionary goal.
With CHANGE, you’re chained to the past, comparing this quarter’s numbers with last quarter’s. With TRANSFORMATION, you’re fully expressing your organization’s values by projecting your vision into the future. It’s a very powerful place to be.
Back to Walmart and Amazon.
Walmart might be the most –er retailer in America today. It constantly touts its lower prices compared to the competition. Its slogan is “Save money. Live better.” (emphasis mine). It’s very clear about its positioning, and it does extremely well; Walmart was the #1 retailer in the world last year according to Business Insider.
Despite that, Walmart missed out. It could have gotten a bigger share of the e-commerce pie if it had taken the opportunity to dive in during the late 1990s, when others, including Amazon, took the courageous step and got started. But it was stuck in the limited mindset of CHANGE, selling more, cheaper rather than the creation mindset of TRANSFORMATION, which could see the possibility of online shopping before it was firmly established.
Walmart’s online sales are still respectable by any standards with, as Business Insider reports, $13.7 billion in online sales in 2015. But that’s a long way to catch up to Amazon’s $107 billion that same year. Amazon is certainly where it is today in part because it took that bold leap at a time when others didn’t.
Do you choose CHANGE or TRANSFORMATION?
Are the decisions in your organization based on looking backward or forward? Are you developing a vision for the future that you plan to create, or are you expecting that “more of the same” will take you where you want to go? If you had no fear and no obstacles, what vision would you create for yourself and your organization?