The challenge to be … and to stay
In economy that is characterized by the speed of technological innovation, big companies of today may become only a memory in the next decade. Key points and challenges for business leaders.
If there is a defining characteristic of a new digital economy, it’s an irresistible drive for innovation. For a couple of decades, technological advances have been entirely transforming our way of life. At the corporate level, these changes also haven’t gone unnoticed: businesses aren’t what they used to be, and so are companies’ ‘life cycles’.
To illustrate the depth of these changes, it is worth looking at Netscape, ICQ or Blockbuster. How is it possible that brands that appeared to revolutionize strategic sectors of the economy were losing their steam until having nearly died out completely?
There could be a number of reasons for this, however the fact remains that at a general level (however, no less valid) the answer is simple: many companies were unwilling or unable to adapt to flexible business schemes of the 21st century. Still others believe that some successful businesses of the ‘90s have sinned by being too preoccupied with securing their investors instead of luring and cultivating loyal customers.
Ecosystems and platforms
The key question then is what ‘adapting’ means. An analyst Haydn Shaughnessy offers some very interesting insight in his recent article published by Forbes. Under a suggestive title “Here´s why Google and Facebook will not disappear in five years time”, Shaughnessy addresses the case of the web giants.
Before revealing their magic formulas, Shaughnessy (co-author with Nick Vitalari of The Elastic Enterprise) emphasizes business models that both Google and Facebook have built around themselves. The author points out that a platform includes both software environment and a set of clear rules within a given ecosystem. It appears that successful platforms are based precisely on a group of individuals and companies whose interactions not only enhance the overall business of its owner, but that of everyone involved.
To illustrate the latter, just think of all the SEO experts that have emerged and consolidated to interpret correctly Google algorithm, or an enormous amount of marketing editors whose work is encouraged by and aligned to AdWords criteria. Similarly, the Facebook ecosystem would equate to all the companies that have found an incredible variety of ways to promote their products through the social network – something that has never happened with MySpace , for example.
Era of flexibility
We often hear that we live in the information age, and no one questions this. However, we also live in the age of business volatility, which means that corporal structures are neither immutable nor eternal. On the contrary, business leaders in the digital economy are dealing with a series of paradigm shifts whose final extent we are still measuring.
As discussed in previous articles, these concepts suggest new, more flexible forms of business management that can be summarized in the following four actions:
- Innovate. On an ongoing basis and mainly in two areas critical to the knowledge economy: marketing and technological systems.
- Motivate. Today’s leaders must take lead in flexible and enthusiastic teams.
- Position. It’s not just about being online; it’s about being visible to the eyes of consumers creating a smooth everyday relationship with them.
- Streamline. This involves generating a flexible work structure and finding the right partners to enhance the efficiency of the business structure.
Adoption of this corporate approach is not only a necessity dictated by the rules of the game today. Indeed, its intelligent implementation will define whether our company will be inserted in business ecosystems that are profitable and, above all, permeable to change.