"Midlife crisis is just a foolish concept and it will not happen to me" – but the fact is that sooner or later, we will all encounter a mid-life crisis. At that point, we start questioning everything as our well-designed life plans feel meaningless. People start acting unwisely, making big changes, and wondering if they will ever regain the sense of self and purpose, as opined by Dr Cohen of Psych Central. In reality, everyone experiences the same crises and becomes stronger in the end. A midlife crisis can make individuals feel like they lack purpose in life and are powerless to change it which often results in rash decisions or branching out.
Similar to the stages of a midlife crisis, every business reaches an inflexion point during its lifecycle when it asks itself how it is going to stay competitive and relevant in the market. The question is normally sparked by falling sales, slumping stock prices or outdated products. Many may consider it as a bump on the road, while others can consider it a moment of crisis caused either by the management, leadership or the internal or external environment. A wrong step in handling this change may damage the business's good track record. In the same way that people buy sports cars or dress younger to mitigate the midlife crises, companies also try to address their midlife crises in their own ways.
Most of the successful Bangladeshi businesses are family-owned businesses with a brilliant track record since the birth of Bangladesh in 1971. And in most cases, these businesses are being run by the second and even the third generation. Based on a report published by PwC, while 84 percent of family businesses in Bangladesh have seen growth in 2018-19, only 34 percent of Bangladeshi businesses say that they have a formalised and documented mid-term plan with 16 percent mentioning that they have no plans at all. Furthermore, 31 percent of the family businesses in Bangladesh have an informal succession plan in place. Based on this, even though there is a big growth among the family-owned businesses in Bangladesh, they often have issues with good corporate governance practices. As a result, whenever a midlife crisis occurs, the organisations often lose their way.
If we consider the industry life cycle, mid-life crises usually occur during the maturity phase of a business enterprise. At this stage, company growth and sales figures start to flatten as most people who need what the company sells have already bought it. Considering this phase, businesses need to find out what is the best approach to handling the situation. Recent stories have taught us that there are several ways to handle this situation. For instance, launching a new product of its core business to appeal to a newer demographic. Moreover, it could completely change the business process or reinvent the product by adapting to newer needs and wants. Enterprises can even take a non-traditional approach to foster a new way of thinking.
Just like individuals amidst a midlife crisis, companies also tend to do things in different ways; but the best way is to take steps that stick to the business's roots. Considering the old saying, "old is gold' – the businesses can try entering a new market with an updated version of their old product. For example, Microsoft Office Word from Windows is now marketed by utilising a cloud-based software as a service platform. When organisations grow up a certain way, that the original leadership vision of the company is often infused into the employees which define who they are and what they do. As a result, there can be a conflict as leadership changes. Sometimes solutions, services and products are no longer fit for current consumer or user needs. Like buying the new sports car or renovating an old house, companies can upgrade their technology and give their products or services a new look to keep in touch with the times.
No matter the tactic, the key to overcoming a midlife crisis is accepting change when it is required. Luckily, the changes do not need to be excessive (like a new love interest, car or an expensive hobby). Companies can modify their genes to reflect today's markets. In conclusion, businesses also encounter midlife crises just like people but can overcome it by making the necessary changes and adapting.
The author is the Managing Partner of Miyako Appliances Bangladesh and the first Doctor of Business Administration (DBA) from IBA, University of Dhaka. He also teaches an MBA program at East West University.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.