Today we talk a lot about digital transformation impact on economy. Recent polls show that the majority of digitally re-wired CEOs predict that the opportunity door of digital transformation will close in two years. I follow a dozens of companies and I am under impression that there is no rush. Can we deduce the reasons from the successful companies? Christy Mathewson is quoted as saying "You can learn little from victory. You can learn everything from defeat."
My example is a company that built a number of mega-plants, was on the MIT review list of 50 smartest companies, the recipients of many GWI awards. Around 6 years ago I was at a meeting summarizing its annual financial activities. In conclusion the CEO - a shrewd, resourceful, open-minded person - uttered a phrase that still resonates in my mind. It was about the company choices - whether to follow Kodak fate and die or reborn and thrive like Fujifilm.
Later I understood that it was not his personal observation. It was a hint at what started taking shape later. The company hired the best world consultants, detailed transformation plans (products and services portfolio restructuring and diversification) were prepared and executed. People were hired and fired…
For the last 2 years this company lost 9-10 points on the GWI scale. The reference list from its website has not been updated for the last 2 years with awarded and executed projects. As they all belong to already existing product lines, one may conclude that diversification does not work as planned. The X-ray of the company website enhanced my foreboding. It contains neither "Products" nor "Services" menus, nor the content that may be called engaging. LinkedIn posts are mostly re-sharing the article written by others. It seems like the transformation led to the unexpected results instead of following the Fujifilm path. Despite that the company did nothing wrong. So what’s the god-damn problem? Why does this company struggle to regain its identity?
I kept looking for an answer until my networking drive turned from curiosity into steady habit. It came naturally. All the possible reasons converge on a single point. It is an adequacy of information used for strategic decision making. All else is superfluous.
Adequacy relates to time.
For a normal person approaching a window it will be unusual to experience a sudden urge to jump out unless something threatens her/his life.
Fujifilm jumped, Kodak stayed. Time to imminent collapse was a differentiator in decision making by these companies.
Fujifilm was not wiser, just luckier. The president of Fujifilm wrote in his book that "what we could not account for in our projections was the speed of the digital onslaught. The photographic film market had shrunk much faster than we expected." Today non-digital markets keep on shrinking with accelerated pace.
Bill Gates said not once that "Intellectual property has the shelf life of a banana". Information much less.
Its freshness - adequacy and truthfulness - depends upon the speed of its running away context. The faster the speed, the quicker the information decay. The witnessed avalanche of new technologies skyrocket the context. Decay may be roughly associated with time delay. It depends on the information source. From my experience, information obtained from consultants has a time delay of 2 - 5 years, from Google (time for an innovative idea to bubble up to the first page) - 1- 100 days, from networking - 1 - 10 days.
The first statement needs some illustration.
Just compare the strength to convince of the above sentence about the China GDP growth and the following sentence that appeared on the net at the same time. Gartner, a leading research and advisory company, has stated that "56% of CEOs said digital improvements have led to revenue growth." In other words, transformation is nice-to-have move, not a business necessity.
Which one shall you choose?
In relying on consultants, the company will be always late, always the second straying away from the true north.
To maintain the adequacy of the information any company shall follow basic rules.
- Adapt the company purpose to impermanence of the information context
- Networking, networking and networking
- 24x7 monitoring of rising Digital Water level
- Make discovering new opportunities (small or big) your primary skill