Sunday, January 11, 2009

The Pace of Change

Following up on the recent Discussion of the Week, I found myself reading a recent BusinessWeek article on the World's Most Influential Companies. I thought it was worth highlighting this article, as it provides an alternative perspective on the pace of business change, which I previously highlighted. Sometimes really big numbers are good to get people's attention, and sometimes it's useful to bring a more focused lens.

Let's take a quick look at the list, and compare it with the 1990s and even the early part of this decade.
  1. Apple - Two things are amazing here - First, we don't call them Apple Computer anymore, because while that is still the core of their business, the influence they have created are in Lifestyles, Telecommunications, Music, and Video. Second, they've overtaken Microsoft. Actually, both Apple and Google (also on the list) have ovetaken Microsoft. 10 years ago, Microsoft was fighting a worldwide anti-trust suit because of their might and size. 10 years later, they are quickly becoming a non-player on the Internet and are seeing their marketshare for computing reduced.
  2. Google - The article makes a great comment, "Ten years ago, all Google had was Larry, Sergey and an idea." There it is again, 10 years. That's all it has taken for Google to not only capture 70% market share in Internet search and advertising, become a verb, and crush Yahoo and AOL, but also prove that by freeing information to the masses, people are able to create new economies.
  3. Unilever - I don't know as much about Unilever as some of the other companies on the list, but the explanation given for their global success - reaching out to and building emerging communities, giving away knowledge to communities, rapidly adjusting their product at the edge to experiment with new business models - all of these align with the 21st century way of thinking about Edge Economics, Long Tail Economies and building value through Tribes.  This should be an interesting battle to watch between Unilevel and P&G in the consumer space, as P&G has also been extremely active in "Proudly Found Elsewhere" innovation model.
  4. JP Morgan - While JPM has been around for years, it was their (relative) prudence and foresight that allowed then to come through the crisis head and shoulders ahead of Citi, Lehman (R.I.P.), Merrill, BoA, Wachovia and many others. One interesting aspect for MBA'ers to realize is that Jamie Dimon (CEO) was fired by Citi because he wasn't able to implement the ideas has has since implemented at JPM. It's important to build a network of people that look at the world in different ways, and be willing to understand them (although not always agree), because you never know when you'll be able to tap into that network.
  5. NewsCorp - Not AOL, not TimeWarner, not NBC. None of these companies had the foresight to see that two critical elements were needed in a digital entertainment world - First, you have to build a platform. Silos don't allow integration, sharing and flexibility to adapt to new markets and technology. Second, you have to embrace and adapt to the Internet and digital media. NewsCorp has done this better than almost anyone (although ABC/Disney/ESPN isn't far they have tight ties to Apple/Pixar because of Steve Jobs).
  6. Toyota - Even though all the signs were on the wall, few people truly believed that Toyota could overtake GM as the #1 auto company. Not only are they far and away #1, but nobody really talks about Honda or the Europeans (BMW, Renault, Mercedes-Benz) anymore, other than as a niche. What's amazing to me is that they will let you tour their factories and teach you their model, but we haven't seen any of their executives leave to run one of the other companies.
  7. Huawei - Never heard of them? You're not alone. Outside of the telecommunications industry (and China), Huawei is a well kept secret. But they are quickly eating into 900lb gorilla Cisco Systems in the race to build the next-generation of connected networks.
10 years!  Just 10 years....  

That's all it's taken for this list to go from Microsoft, Cisco, Citi, Big3 Autos, and TimeWarner to Apple, Google, Huawei, JPMorgan and Toyota.  

A lot of this change had to do with companies that truly embraced the new technology, but it's also highlighted by companies that took a very different view of their markets and changed the rules.  

It's a potentially scary place to be if you're looking for long-term success with models from the 20th century.  But on the flipside, it's an extremely exciting place to be if you're willing to look outside the box (maybe a long way outside) and challenge some conventional thinking, rapidly adopt technology, and explore some of the concepts that will be demanded by the global economy in the 21st century.