You can’t look at the future from the standpoint of the present.
Friends of mine asked me to attend a strategic planning session where they were discussing ideas to improve who they were and how they could wow their customers. This is what I told them: you are here, now, you see yourselves in this workplace, these market conditions, these ways of competing and these ways of operating; and you are thinking of how to improve, how to innovate, within this framework you are accustomed to. If you look at the future in this context, you will fail.
Most leaders in today’s enterprises and most middle management have grown accustomed to a specific paradigm of the Business Enterprise – and it is a powerful paradigm because it is shared by the vast majority of businesses in the economy, certainly in the Western economy of the U.S., Canada and Europe. And so, when we plan to innovate, when we look at the future and decide our next move, the things to focus on, we are thinking that this will continue to be the Enterprise we will be working within – or we don’t even think about it, we just assume it.
But the world has been changing at a mind boggling speed for many years, a change that has been relentlessly building up to a new paradigm, something completely different from what most are accustomed to. Now, in 2015, we have gone over the tipping point of this change and there is no turning back. Going forward, you are either on the wave or you are condemned to play catch up.
You are either a Company of Yesterday… or a Company of Tomorrow, Today.
2013 is mentioned by some sources as the year when Millenials reached parity with Baby Boomers in the work force. By now, Millenials are ahead of Boomers. They’re ahead of Gen X’ers too, by the way. By 2020, only 25% of the work force will be Baby Boomers. Millenials are now between the ages of 18 and 34. By the end of the decade, the oldest of them will be pushing 40. What that means is that, in a few years, they will be taking over middle management – and everyone working for them will be Millenials.
If you were in 1980 and you were planning the road ahead, you would be in a world where 3 countries dominated the economy – the U.S., Japan and Germany. You would be looking at things before Jobs and Gates ‘did their thing’, when the PC, Local Area Networks, data bases and indeed the Internet had not yet happened. 10 years later, things were very different; Ford, General Motors and IBM were crashing and Intel and Microsoft were exploding.
Most Enterprises today are still in the same place as those in 1980; but where we are is a lot closer to 1990! So, think about it: do you want to be like Ford and IBM in 1990… Or like Intel and Microsoft?…
You no longer have the luxury of thinking that you have time and you can think about it and plan carefully. Unfortunately, we’re passed that point. If you think that you don’t have to change right away, that you don’t have to be bold and aggressive, you are already outdated, obsolete, condemned to be a company of yesterday for a while… and then go extinct. If you don’t believe me, go read the history of the 80’s and the 90’s.
What is a Company of Tomorrow, Today?
Companies of Tomorrow already exist; the pioneers of the ‘New Frontier’ have already showed up and have been around a little while. You can see a glimpse of tomorrow when you look at Amazon or Facebook. If you examine start-ups of the past 10 years, launched by twenty-somethings, you will find many of them.
For many years, it was difficult to discern where this change in the Enterprise construct was heading but today we can already see clearly the basic outlines of tomorrow’s enteprise – a new world that is already here.
I’ve been studying and monitoring the way the Enterprise is changing for many years. Here and there you could detect new trends, new ways of doing things and new ways of thinking. Nobody came up with a recipe for a new model; pieces of this ‘puzzle’ gradually surfaced and converged into a framework which, with time, will evolve a bit more and mature. The following outline is where I believe things are now and may be useful for those who want to change but don’t know where to start or what to look for.
Relative to Yesterday’s Companies, Companies of Tomorrow are not monolithic, heavy, hierarchical, bureaucratic and slow. They are, above all, very flexible, agile, loose and unconstrained. But what makes them thusly? – the following 5 characteristics:
They are Cloud Based – they don’t bother to carry in house a heavy IT infrastrcture of servers and big Enterprise applications. Not only can IT assets be moved to the Cloud, there are loads of IT assets available through the Cloud, capabilities that would be phenomenally expensive and impractical to bring in house. If you rely mostly on your internal IT capabilities, that will make you quite uncompetitive, at some point.
They are Mobile centric – desktops are so 1980’s and 1990’s. Desktops are made for the individual worker in a cubicle. They relate to a highly structured work environment, with designated spaces and where people are organized by Functional groups. CofT’s abandoned this paradigm and don’t have desktops, perhaps not even laptops. They are strictly mobile, virtual and un-tethered to a physical, static workplace; and they rely on the most powerful IT asset of today – the mobile App!
They are Social – people don’t work within Functional groups and then congregate around conference rooms in traditional meetings. That was the old world of ‘stop-and-go’ (the world stops while we go to the meeting place and discuss issues. Then, when we go back to our desks, the world starts moving again – or you’d like to think it does…). In CofT’s, people work in ‘digital HIVE’s’ (see here and here) that are not Functionally oriented. Instead, these workplace networks are defined by end results, objectives or missions. People do work based on what needs to be accomplished, not based on what each one is pre-determined to do. Thus, HIVE’s are dynamic, fast and highly adapatable. They move with reality, they respond at the speed of reality, they improvise more often than they follow pre-established rigid procedures. The very word ‘procedure’ would make no sense in a CofT.
They are Analytical – in yesterday’s corporation, if you wanted to analyze any aspect of your competitive environment, you relied on data residing in your corporate databases. If you wanted to use data from external sources, you would need to bring that data into your servers; or you would need to have access to someone else’s servers. Not anymore. Today information is wide open and easily accessible. A small company can mine this vast ocean of information and be as informed about competitors and customers as well – or better – than large mamoths. The Big Data movement brought us advanced practices of information mining; it figured how to mine unstructured data residing all over the internet; and brought us inexpensive tools to exploit information. Access to these capabilities is not expensive because of this neat construct of today: the Cloud.
They are Millenial – this is the element that puts everything together. Many of the workplace technologies of today have been around for quite a while but, as it happened in previous historical iterations, it takes a new generation to bring about structural paradigm changes. I think that the Millenial generation is probably the most powerful competitive weapon of today’s Enterprises. Millenials grew up in a world where the Internet was not only used as a source of information, it was used for social purposes. Working in a virtual, social model, is second nature for these young people. They have ‘built in’ skills that older generations can’t match because we have to learn them; they grew up with them. Their capacity to multi-task, to leverage virtual communication, their ability to look for and find multiple sources in the Internet, their comfort with diversity and moving targets, the way they thrive on change – these are skills that should be fostered and embraced. To be a Company of Tomorrow, your smartest move would be to give space to Millenials and learn from them. Instead, most companies will resist going the way Millenials bring to the workpalce.
The characteristics I listed above are not something I alone discovered and revealed. Everybody knows these things. Each of them has its own argument and, generally, those arguments are hard to refute. And yet, most people in the Enterprise resist adopting these philosophies because most people think that, in spite of the merits of these new models for the workplace and workplace technology, yesterday’s ways are better or they are “good enough, thank you”.
But these approaches to technology and people are not what is important. What you must try to understand and be weary of, are the competitive implications of CofT’s popping into the economy more and more. You need to realize that being a CofT is not a challenge to your company alone; your customers are becoming CofT’s; so are your suppliers and your competitors. Millenials are not a choice only you are facing. Millenials are everywhere, they are the common element of every player in the marketplace warfare. And the technologies that I listed above are available and accessible to everybody, including your smallest rivals.
Social beyond the Enterprise
One of the implications of the CofT I described above is that the boundaries of the Enterprise have blurred. ‘Digital HIVE’s’ are possible in the Enterprise but they are equally easy and natural across Enterprises. Imagine a Manufacturer that produces product on a Make To Stock environment. One of its biggest challenges is to guess (a.k.a. Forecast) what Customers are going to order. CofT’s naturally work with the staff of their customers in cross-Enterprise HIVE’s so that you use the knowledge of your Customer’s staff to guide your supply chain. A friend of mine said to this “well, that is CPFR”. No, not really. In a digital HIVE your staff and your customer’s staff work in a social network and they work there all the time. They don’t meet weekly to look at reports; they work together to react to market events and to trigger response from the supply chain – when these events occur, in Now Mode, and not in a stop-and-go manner.
Structured Processes become Neural Social Pathways
Throughout the 1990’s and early 2000’s, thanks to Michael Hammer and SAP, companies moved to operations structured in Business Processes. Structured processes are linear and designing them gives Enterprises a sense of structure and control. Unfortunately, that’s an illusion. In most environments, people follow process 25% of the time; and improvise against exceptions the rest of the time.
CofT’s work in Digitial HIVE’s. As such, the improvisation that occurs most of the time is not made by individuals who communicate through emails and meetings. Instead, improvisation occurs dynamically, amongst people who are networked all the time around broad missions. Whether the situations they face is common or unexpected, their way of operating is the same: they collectively determine action pathways, what each one will do, and deal with the situation quickly. When situations are common or even planned, they will follow repeated pathways; if they are new, they improvise new patheways together and without any stop-and-go. Socially Mature Enterprises will include suppliers in their HIVE’s so that the reaction of a supply chain can be quick and self-coordinated.
Fast, frugal innovation
One of the phenomena that has emerged in recent years and I find most enlightening is the Indian business philosophy called Jugaad. It’s based on the idea that you make do with what you’ve got; or, better, “you do more with what you’ve got”. If you Google “Examples of Jugaad”, you will find thousands of examples of the application of this philosophy in day to day life of common folk. But Jugaad is emerging also in big industry; and not only in India or emerging markets but also in the old economies of the West.
In a CofT, Innovation is very much ‘Jugaadic’. Just look at the many successful start-ups in the Internet economy and how frugal their path to success has been. Hugely successful businesses have been made possible by the world of Cloud, Mobile, Social, Analytical and Millenial. And it doesn’t cease to amaze me how many Innovations reach a broad population without big fuss, which wouldn’t have been possible in the world of large Enterprise only a decade ago.
In the most recent “Apple Event”, we witnessed a demonstration of an App called AirStrip, through which a Doctor can examine a pregnant patient at a distance by both the Doctor and the patient wearing Apple Watches. The elegance and simplicity of this App is just amazing. There is no massive, traditional IT involved. This is the world of Apps where great things are possible with simplicity.
If you go to the Web Page of eHealth of the province of Ontario (Canada, of course), you enter a site with a pretty neat presentation of a system that virtualizes patient care administration. It’s well structured and I’m sure it functions perfectly. But look at the complexity of the thing!
Then, we look at a platform created by Apple in collaboration with Health professionals and institutions called Research Kit and some of the applications derived from that platform. Research studies about patients with Parkinson’s, for instance, using iPhones and the Cloud. Someone has to put together a database, of course, to store the results of those studies but that’s easy to do and researchers can mine that data from a Mobile platform.
Thinking of Research Kit, you can easily extrapolate how relatively inexpensive it would be to create an eHealth platform where a Pharmacist, a Doctor and a Patient would share information about the patient’s Health and indeed about treatments.
Another example of something that could have become very complex in a traditional IT approach, but was built with simplicity in the world of Mobile and Apps, is this App created to help Doctors manage their private practices.
Think About It…
The scary thing for companies of yesterday is that if you think of the future from the standpoint of the yesterday’s paradigm – the vertical corporation, the traditional hierarchy, the internal IT box, the usual HR structures – you will be overtaken by competitors with far fewer means, with access to inexpensive technologies, information and indeed customers and who are not encumbered by the structures of the corporation of yesterday. You will be like Ford, IBM and GM in 1990.