The need for speed

Fourteen years ago, I was a guest speaker at a large NCR-hosted conference on the future of big business. I was privileged to be sharing the stage with legends such as Geoffrey Moore, the author of ‘Crossing the Chasm’ (to my mind, still the definitive text book on how to sell innovative products and services).

At the time, I had just left Accenture after spending 23 years helping big businesses to become more agile and customer friendly by embracing innovative technologies. I had decided to jump ship to start my own Internet business. So, perhaps predictably, I chose a subject very close to my heart: Why is speed so critical to business success?

A few days ago, I stumbled on a dog-eared folder containing my original speech notes. Out of curiosity, I started reading… and was stunned. After blowing away the dust, the messages came shining through with exactly the same power and relevance. Speed is as critical to business performance today as it was back then. And that explains why I have decided – with just a few topical tweaks – to share those thoughts with you now.

I hope you find them as thought-provoking as NCR’s clients did fourteen years ago. Enjoy…

Big businesses are like giant cruise liners. They have both been around for a long time and, every year, they seem to grow bigger and ever bigger.

They are massively impressive and can certainly carry a lot of people. But they are also cumbersome and ponderous – taking an age to manoeuvre or to stop. They also have a leisurely, self-indulgent, almost superannuated air about them.

Internet businesses, on the other hand, are like highly tuned racing yachts. They are superfast and supremely agile – the ultimate extreme machines. However, they are also unforgiving and vulnerable in heavy seas. They can be becalmed by capricious winds. And, in wrong or inexperienced hands, they can be deadly dangerous.

Mind you, it’s not been all plain sailing for the ‘big liners’. Many have had a very rough ride in the recent economic storms. They have suffered from five key phenomena:

1. A shift in power from sellers to buyers.
2. Changing consumer and government attitudes towards ‘big-ness’.
3. Industry convergence.
4. A short-term focus.
5. More agile and innovative Internet start-ups that are stealing customers off the ‘big liners’.

These five forces have led to the most competitive environment in the history of commerce. And it’s an environment that spells big trouble for the giants because they are simply too big to respond quickly to threats.

So what will be the combined effect of these five forces?

• Many more products will be commoditised.
• Consolidation and convergence will continue across the industrial spectrum.
• Companies will eventually learn that they cannot be good at everything they need to do.
• New challenges will continue to appear thick and fast. What’s more, big companies will no longer have the luxury of time. They will have to plan and execute their strategies faster than ever before.

So what should big businesses do?

Well, the answer is to learn from their rivals. Develop the same sleek, hydrofoil hull of the racing yachts and so become quicker, slimmer and a lot more agile…

These are the priorities…

• Shed weight and lose ballast (the lighter you are the faster you go). To be specific you will need to:
  – outsource (non-core) functions. Indeed, drop DIY in favour of DDIY (don’t DIY)!
  – remove un-necessary complexity from the business
  – jettison poor performing products and services.
• Raise yourself out of the water by forming alliances
• Acquire better radar (to spot new threats and opportunities)
• Develop alternate route maps (scenarios)
• Give the young guys – and girls – a turn at the wheel
• Take more care of high-value customers – stop them opting for an adrenalin ride on a racing yacht!
• Change the design of the boat (company) to make it cut through business waters quicker. Embracing agile development methods will form a vital part of this survival strategy.

But that’s only half of the story… Internet businesses also have to learn the lessons of survival:

1. Hang on – always focus on the priorities
2. Plug the leaks (i.e. start making profits).
3. Consolidate.
4. Take on a few old guys (suits) – people who have crewed for winning teams and understand the disciplines of success.
5. Improve customer service.
6. Scale and simplify – remove complexity and lift performance in the same way that Sir Ben Ainslie helped the US to snatch victory from the jaws of defeat.

Get it right and you will have a robust business. Get it wrong and you will be crushed on the rocks.