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Business Insulation – The Good and Bad Opportunities

“Business insulation” – I’m going to trademark that to stand for both the visible and hidden layer(s) that stops/ slows businesses from learning outside processes and systems. I think about business insulation for two reasons:
  1. It’s common for companies in “typical” industry positions to operate much like they have operated since inception. Many industries and businesses stay closely aligned to original go-to-market strategies. Folks do not realize the opportunities afforded by fast-growing technology companies and the evolution of “best practices”.
  2. Companies with business insulation are ripe for both good and bad opportunities. The good opportunities include companies that can be made stronger and grow faster sustainably with streamlined workflows and minor tweaks to business systems. The bad opportunities (“challenges”) include the difficulties for companies to overcome the insulation. How do they learn of opportunities, let alone implement them? Think: change management is the number 1 driver of failed implementations.
Business insulation masquerades today as:
  • Excuses from “That’s just how we’ve always done business” to “Things are going well, let’s not rock the boat”.
  • Working so deep in the day-to-date that leaders are unable to pull up for a more strategic view. They’re unable to steer away from risks and steer towards opportunistic endeavors.
  • Hiring the same type of candidates repeatedly creating a homogenous workforce and culture.
  • A team led by distrustful executives playing political chess.
  • Lack of deliberate time for learning from current and outside industries.
Of course, business insulation has the benefit of keeping companies squarely focused on what they’re good at. That can be a type of long-term strategy. However, over time, these strategies turn companies into highly niche offerings that take the company from long-term sustainability to short-term rewards.

What elements are contributing to business insulation where you are? How are you contributing to the insulation? How are you tearing down insulation?


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