Tidal waves of disruptive changes are coming and threatening the very core of once super successful dominating businesses like IBM, MSFT, Intel, GOOG, Boeing, etc. Let’s focus on technology industry first. We’ll leave Boeing’s story to another article later.
It is no longer a speculation; it is the reality. Look at the PC industry: smaller, lighter, more personal devices like tablets and smart phones are enjoying the exponential growth, while the global shipment of boxed PC has been dwindling faster and faster – already dropped almost 11% year over year by Q2 2013.
For MSFT and Intel, yesterday’s high-profit breadwinner can no longer be sufficient to feed today’s hunger.
Innovate Faster or Die Sooner
Eastman Kodak was a classic example: too slow a response to the digital transformation means being a dinosaur on the earth after the meteoroids pounded. This time they knew the disaster was coming and saw their own demise helplessly.
Similar stories are always present in the history of business.
IBM once had the mainframe dominance in worldwide markets and the company run like a family. Years of transformation from an old steady mainframe and PC manufacturer to a technology service company did not pass through without the pain. The elephant finally danced a little bit. Today, it still has to continue transforming itself and locating its next footing of dominance or greatness.
Even for GOOG, the Wall Street darling of the latest decade, is seeing the tidal waves towards it. Pay-per-click search revenue is shrinking with business owners turning more and more to mobile advertisements for better ROI. A business based solely on a set of search algorithm can be unsustainable – there could always be another set of smarter faster algorithm down the road (maybe by some college kids again), even if the dominance (or monopoly, or purchasing power) today could delay any infant competitor’s marketability. Smartly GOOG has been trying to diversify their business in mobile and other areas for years.
All companies, no matter what dominant positions they may have built over the years, are seeing the waves coming, not on the horizon, but already in their backyard, feet or inches away from reaching their front porch. Today, no company can afford to stand still and in fact no one can stand still.
Have these companies ever feared that this day will eventually come? Have they followed the beliefs of human evolution, especially of the expansion of human brains and senses, the cravings for grander aesthetics, productivity, ubiquitous connectivity and existence?
Have these once smart companies already had tomorrow’s breadwinners in stock? Not quite. Many of them are just scrambling to play the catch-up games, not at all can be one step ahead of the game. And that could be a dangerous sign.
Business without a long term strategy on promoting innovations as part of the life, without the constant sense of urgency facing competitions can be easily swept away by today’s tidal waves. If luck is on their side and right strategies are put in place timely to change the playground so that they can maneuver one or two steps ahead of everyone else, they may still transform and survive, but it needs the right visionary leaders to lead them into the next generation.
The Human Factors
How about the human factors? Every business’ success is about its people’s collective mind powers, energies and achievements. Culture trumps strategy every time. Without a long term focus on innovation at the very core of the company culture and its business values, catch-up or slim-fast schemes may only save the management for days, but not for years or decades. In fact many such schemes may not work at all or take effect fast enough to escape the tsunami of today’s changing world.
Many companies are going through the painful business transformation at this very moment, no matter due to the worldwide economic recession, the increasing global competitions or the fast technology advances. Some traditional companies are struggling in the survival mode. For so many long-time employees, the human toll of such transformation could be severe. Cost-cutting and layoffs are usually the first means adopted by the management from its modern day quick-fix toolbox. Inside many non-performing business units or “cost-centers”, uncertainty-driven emotional burdens can be felt everywhere. Fears and insecurity usually bring out the worst human traits and create many wasteful office dramas. It absolutely takes a lot more management skills and thoughtful thinking than a relentless number-crunching to lead through such a business transformation with grace, respect and consideration to its long-term success with people in it.
No company can be lasting without a cultivated winning culture with its people playing the essential roles. Without a proper culture in place, no matter how lean a company can be, it will not guarantee its survival from the next wave.