By John Bostick

How business travelers respond to air turbulence while flying says a lot. Some stop what they are doing, tighten their seatbelts, fold their arms and try to wait out the chop. Others stubbornly try to write notes, struggle with laptops or read bouncing magazine articles. A few keep switching activities based on what works, regardless of the number and severity of the bumps.

There are parallels between the response to turbulence on a plane and the response by business people to the accelerating pace of change in corporate information technology. Many IT operations managers react to the dynamic environment like the first and second groups of air travelers. They circle the wagons and wait for the disruption to pass, or they forge ahead shutting out the distractions. The trouble is they have no way of knowing whether the turbulence will stop, get better, become more predictable or whatever. The environment is not within their control. They can only control their response. So, riding the flow of the turbulence is the only way to find a productive activity.

Business in today’s constantly changing atmosphere is inevitably a bumpy ride. Corporate technology executives would be wise to take technological disruptions as opportunities to transform business practices and processes rather than shut down operations or continue counter-productive activities.

Transition points are opportunities for business transformation rather than causes for failure. And here are some ways to respond to transition points:

New Management Initiatives—These initiatives must be introduced and designed to help drive growth, profitability and shareholder value. Some companies have introduced customer or quality initiatives. Others have sought ways to reengineer their processes or reduce operating costs. Some have introduced initiatives to digitize or globalize their businesses. All such efforts depend on successful change management if they are to achieve their objectives. In other words, the leaders of the initiatives must know how to ride turbulence.

Mergers and Acquisitions—In the wake of deregulation in recent decades, the M&A movement has driven vast amounts of change in various industries, particularly through mega mergers in areas such financial services, telecommunications and media. Enterprises continue to consolidate in order to address competitive challenges and commoditizing markets, as well as capitalize on anticipated synergies. Yet, business analysts argue that two-thirds or more of all mergers fail to achieve stated objectives. The reason: Consolidating organizations, cultures, processes, practices and systems is not easy. It takes great turbulence riders.

Partnerships and Outsourcing—These approaches enable companies to use the capabilities of external parties as leverage, rather than struggle to buy or build them. By creating alliances with specialists, enterprises can acquire the capabilities they need to effectively compete in demanding markets—without bearing all the risks that would be associated with building them internally. Similarly, outsourcing enables enterprises to concentrate on the core capabilities that differentiate them in the marketplace, while ensuring that non-core, yet nevertheless critical and supporting systems, are effectively managed. Such moves enable companies to anticipate and react more rapidly to market change, plus they receive the capabilities and benefits now instead of waiting months to generate momentum on their own. Analysts call this strategic multi-sourcing, which is another term for thriving on turbulence.

As one might imagine, the acceleration of change in today’s markets is generating new thinking about what it takes to strategically lead, anticipate and manage change.

“The amount of change in organizations has grown tremendously over the past two decades, and the rate of change will only accelerate in the next few decades,” writes John Kotter, professor of leadership at Harvard Business School, in his best-selling book Leading Change.

He argues that successful change requires forceful and distributed leadership. Change leadership, Kotter explains, “Cannot be confined to one larger than life individual who charms thousands into being obedient followers. Modern organizations are far too complex to be transformed by a single giant. The leadership effort must have support from many people who assist the leadership agenda within their sphere of activity.”

Interestingly, the acceleration of change today may be assisting those change leaders and advocates who are trying to address step one: establish a sense of urgency. Market turbulence—which may be vividly reflected in stock prices, quarterly numbers or a hostile takeover threat—certainly can create urgency.

Then again, some companies tend to slowly unravel, incapable of making the kinds of turnarounds that Louis Gerstner made possible at IBM in the 1990s. The first challenge, Kotter points out, is to establish that a reason for significant change exists.

Despite the necessity of being able to lead and drive change, there’s a significant risk that employees might suffer from what change specialist Eric Abrahamson calls “repetitive change syndrome.” In his book Change Without Pain, Abrahamson warns of “initiative overload, change-related chaos and widespread employee anxiety, cynicism and burnout.”

He contends that these factors can fatally undermine change efforts: “Not only do relentless tidal shifts of change create pain at almost every level of the company and make organizational change harder to manage, more costly to implement and more likely to fail, but they also impinge on routine operations and render firms inwardly focused on managing change rather than outwardly focused on the customers these changes should serve.”

Rather than embracing radical and painful approaches to change, Abrahamson favors efforts that incrementally build on existing strengths, assets and capabilities. He calls his approach creative recombination, making the case for a smoother, more cost-efficient, less painful approach to change. “Rather than obliterating and then reinventing anew, creative recombination seeks sustainable, repeatable transformation by reconfiguring the people, structures, culture, processes and networks the company already has," he explains.

Again, one of the key levers of change is outsourcing. “Outsourcing is, first and foremost, a tool for organizational change,” contends Michael Corbett in his book The Outsourcing Revolution.

Corbett explains that outsourcing can bring a full range of benefits. At a basic level, outsourcing can reduce costs. Half the executives that use outsourcing state that cost reduction is the top reason for their decision. While cost savings can be passed on to customers or shareholders, such actions also are a critical first step for many organizations that must redeploy and reinvest their capital to address new market challenges, anticipated or unanticipated, and remain competitive.

Another benefit of outsourcing is the capacity it allows for driving innovation. As the story of Procter & Gamble suggests, companies can at the same time turn themselves around and establish new levels of competitive differentiation through outsourcing.

Having experienced a growth slump in the late 1990s and watching its stock collapse, P&G, the world’s largest manufacturer of consumer packaged goods, embarked on a series of far-reaching change initiatives. The company began globalizing its activities by creating a global shared services model to replace the geographically managed, multi-national model that had previously been in place. This effort set the stage for a series of new outsourcing partnerships that would enable the company to concentrate on its core capabilities of design and innovation.

P&G signed large agreements with Hewlett-Packard to manage IT infrastructure and accounts payable. It inked a 10-year agreement with IBM to provide employee services, including payroll, benefits, relocation and travel support. Jones Lang LaSalle was given a five-year deal for facilities management services, including maintenance, remodeling, security and mail services. In addition, P&G also looked outside for someone to handle aspects of its data infrastructure management.

“In the days that followed the signing of the contracts and every single day since then we have worked to understand each other's cultures, respect new approaches, and share ideas, frustrations, concerns and rewards,” says Filippo Passerini, CIO and global shared services officer of P&G. “On a regular basis, we assess the health of the partnerships, measuring nine different dimensions with leadership teams from both sides working together to ensure it gets better and better.”

Such leadership has provided the foundation for P&G’s present effort to look externally for research and development capabilities that can heighten its ability to innovate. With the firm backing of P&G’s senior leaders, the company is now generating as much as 35 percent of its innovations through an approach it calls connect and develop. This open model of innovation is aimed at obtaining half of P&G’s new products from its own labs and half through external parties.

“With a clear sense of consumers’ needs, we could identify promising ideas throughout the world and apply our own R&D, manufacturing, marketing and purchasing capabilities to them to create better and cheaper products, faster,” explain Larry Huston and Nabil Sakkab, two leaders of P&G’s outsourced endeavor, in a recent issue of the Harvard Business Review.

The results have been phenomenal. “Through connect and develop—along with improvements in other aspects of innovation related to product cost, design and marketing—our R&D productivity has increased by nearly 60 percent,” state Huston and Sakkab. “Our innovation success rate has more than doubled, while the cost of innovation has fallen. In the last two years, we’ve launched more than 100 new products for which some aspect of execution came from outside the company. Five years after the company’s stock collapse, we have doubled our share price and have a portfolio of $22 billion brands.”

Such stories demonstrate the power of looking outside—through outsourcing and partnerships—to obtain the necessary capabilities to adapt and thrive in an atmosphere of market change. P&G was confronting a transition point in its marketplace. The company realized it could not meet its growth objectives of four percent to six percent—the equivalent of building a $4 billion business in one year at this point—by relying solely on its internal resources. It needed to focus on core capabilities and more effectively leverage its existing assets to reach its growth objectives. It accomplished this goal through active new partnerships and outsourcing.

While all of the approaches to confronting change mentioned above represent significant risk in their own right, there is perhaps more risk associated with failing to act. It is critical to recognize transition points when they occur and take the necessary steps to address changes they signify.

Few companies can expect to live long on the legacies of the past. Markets are dynamic and turbulent, prone to something Austrian economist Joseph Schumpeter called creative destruction. That’s truer now than it was a century ago when Schumpeter said it. The acceleration of change only enhances the vulnerability of today’s corporate giants, while empowering and enabling challengers to compete for new market opportunities. Given these circumstances, enterprises must learn to specialize in riding turbulence, if they hope to reach new heights.

John Bostick is president and CEO of dbaDIRECT which provides data infrastructure management services to Fortune 1000 and Private 500 firms. He can be reached at john.bostick@dbadirect.com.