The asset value of upside-down questions
*This content is brought to you by Thomas Oosthuizen
We all know the changes of the last twenty years have been profound.
How will these changes impact our business or is there a way we can take advantage of these changes?
The vast portion of humanity fears change. The same is true about business.
It is easier to follow than to lead. Some even say wait for someone to fail first. Even with Facebook, we had Myspace first. Yet, I don't want to believe that is "the truth".
With major change you face risks. Yet, there are people who see such risk as the time to be audacious. For others, to believe they will prevail (how often have I heard from executives that Amazon cannot afford, long-term, to deliver for free to Prime members?).
For more information on Dr Thomas Brand, click here.
We know from history that most companies will make some changes and believe that will be enough to sustain performance.
This is no longer realistic. Technology change is too widespread and deep. It is time to set-aside preconceived notions and ask the questions most of us fear to ask.
Whether a company is a comfortable market leader, a distant number two, a challenger brand, a me-too brand, a small or a focused brand, every brand owner asks the same questions: how do we leverage technology to retain or grow competitively?
Most importantly, how can the changes make our business even more competitive? We know, that with some exceptions, most very large companies do not change. So the smaller, agile companies have a great advantage, right now.
Most leaders today were "first-movers"
First-mover market entrants and green-fields brands largely led the revenue and profitability stakes for many years in most markets.
Arguably, if Sony did not decide to dominate the market for video cassette systems, Beta would have won. It was widely acknowledged that Beta was the better system, yet Sony was more agile and faster to market.
Similarly, if Microsoft did not decide to make its operating system affordable and accessible to all, it is possible that another company would today dominate the world of software operating systems and the many downstream innovations of Microsoft. That decision formed the foundation for all else.
Then the "cosy" situation changed, very fast
Then the Internet happened and within twenty years, the world changed.
This video depicts it well, https://statisticsanddata.org/data/most-valuable-companies/
A mere twenty years ago, fast moving consumer goods, automotive, fashion, banks, insurance and many traditional categories of products and services, dominated the Top 100 global brands. Today this context is entirely different. Top brand tables changed slowly.
Even the way we value companies changed!
When we compare the largest companies today, a few elements are evident: 1. They became dominant fast relative to the history of global companies of the last 200 years, 2. They became dominant, even whilst many have a lower market share than companies that existed for a long time, 3. The market attributed value to them faster than their growth justified.
Tesla is not Toyota in any comparable way, yet it is more valuable.
For more information on Dr Thomas Brand, click here.
A re-set of the way companies are measured and valued, changed. The behaviour of consumers changed overnight. When we read that in many countries, people under 40 years of age no longer prefer traditional banks as their transaction provider of choice, we know it is possible to change consumer behaviour fast.
Many believed you need attitude change before behaviour change, now behaviour drives attitude.
How did this happen and how do we respond?
- Can these new first-mover companies remain ahead? How and when will they be "disrupted"? Disruption is no longer industry-bound, it can come from anywhere. Where can it come from?
- What unsolved customer needs are still viable for product and service development?
- What new ways of thinking and working can we use to create new solutions and instil that amongst staff?
- Do these new companies have a natural point of saturation? How much more can Instagram grow? What must companies do to overtake the leaders of today?
- Can new companies in areas like fintech eventually totally erode the stature of traditional banks?
- Can some traditional companies transform sufficiently against newcomers to remain market leaders? If so, in what order and at what level of magnitude?
- Will some industries be entirely unaffected? It is conceivable that in some areas, i.e., mining, the impact will be less? Certainly not if we compare logistics, productivity and routes to market.
- Is there a point when the increments of tech innovation become so low that whatever is added is irrelevant in how it serves customers?
- Technology and marketing are converging, is there a point where marketing will lead innovation more than innovation itself? When we view the metaverse in all its various iterations still to come – when will engagement alone be the advantage?
- Never have we added so many new terms (metaverse, NFT, Web3, interoperability, etc.) to how a business must think and what must be considered. It fragments thinking even more and makes focus harder. What is relevant? What will prevail and what not? What impacts and what will not?
- Why are some industries, at the very juncture of these changes, unable to escape their traditional business domains successfully (Telco's being a very good example)?
- Can new insights brought about through technology, new data sources and connectivity of animate and inanimate entities, create new market opportunities?
- Are fully sensory experiences by customers close or still far away? How can it be used? Can it add advantage?
- Does creativity of how algorithms are used, how deeper data analysis are conducted, how variables are overlayed and existing brands perceived open totally new gaps for companies? If so, how must we view and use data? The data discussion is about what we know, not about what we don't know. The latter is far more relevant.
- Operationally, we already know how large technology is in logistics, it is a small indicator of how much deeper it can be used in other areas that create market advantage.
Meaningful change requires hard questions
The only constraint to the future lies in the questions we ask. Yes, transformation is not easy, yet the substance and required speed of transformation lies in asking different questions.
The same questions cannot drive new solutions. If you do not introduce disruptive forces and new processes to drive questions and change the mindset of people, company will be its own biggest constraint.
SpaceX would never have existed if the same questions were asked.
When CEO's and executives are surveyed, the vast majority, across many surveys in many countries, state that technology will impact them. In some they are at the forefront of such change, in others they are not yet clear in what way the change will happen. Most now realise innovation is key, yet does that mean changing the core business or just aspects of it? Are we serious enough when we ask these questions, and do we dare ask the hard one's? I would rather know I am in trouble, than to wake-up one morning with a shock.
When we divorce a business from its operations, it changes what is possible.
There is no one single answer to these questions. If we limit the questions, we limit the answers.
This is not the time to fear words, competitors, questions or solutions.
This is the time to invoke the least contaminated thinkers.
For more information on Dr Thomas Brand, click here.
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