Increasing Competition And Uncertainty/Chaos Are Linked

 

"...those that found ways to supply and thrive in the chaos hold valuable lessons. Paradoxically, many are meeting chaos with chaos, loosening controls, sometimes radically, while guiding the company in innovative ways......yet even those efforts may lose their effectiveness over time. Today's fast-moving reality may force a rethinking of just how long companies can and should survive......the hard fact: we're going through a transition that will interest historians centuries from now. It's partly a result of globalization, partly the digital revolution and the information-based economy its spawns. By freeing companies from physical assets, it has made them more flexible and more vulnerable. Microsoft can get in and out of many businesses - Internet search, online advertising, mapping, electronic payout - at virtually a moment's notice, but so can anybody else. (Indeed, Microsoft itself has been disrupted by net-based competitors like Yahoo and Google.)"yet we still see companies of every kind totally blind-sided by competitors they never saw coming. EBay and its PayPal unit are disrupting credit cards. Google is now trying to disrupt PayPal as well as the whole ad-sales industry. YouTube is disrupting television, and MySpace may next disrupt music......the digital revolution also makes business more chaotic by shifting information and power towards customers. And it changes products in every industry, young or old. Today cars are essentially computers on wheels. Some credit cards have chips in them. Some greeting cards have chips in them......Their industries may be transformed by them, and more industries will be transformed everyday as the costs of computing power, telecommunications and data storage continue to plunge. So the forecast for most companies continued chaos with a chance of disaster. The challenge is getting comfortable with it - especially hard because most corporations were created explicitly to resist chaos..."

Geoffrey Colvin, 2006d

Need to open your eyes to disruption in other industries that might provide important warning signs for your industry. For example, the music industry has progressed from buying albums, cassettes, CDs etc into the digital age of Napster, iTunes, and now streaming, eg Pandora, Spotify, etc..
Traditional players are acquiring more tech start-ups, such as Westpac's A$ 5 m. investment into peer-to-peer lender SocietyOne and Commonwealth Bank's recent A$ 40 m. acquisition of digital banking start-up TYME. In addition to hoping they have made a good investment, the traditional firm is trying to understand these possible disrupters, eg understanding how people are thinking in these new industries, to look at the sort of things they are doing and their suitability to be conducted in-house.

"...So it is really part of gaining experience and gaining access to their minds..."

Lindsay Maxsted as quoted by Patrick Durkin, 2015b

 

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