Four Warning Signs for Corporate Survival

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Just because we dominated our market during the industrial era, does not mean that this is a given in the digital economy.

 

It’s that time of the day when you and that line-of-attack team (aka the board) get together to align your projects to match the expectations of Wall Street.

It’s the same old format and questions. Where can we squeeze costs? How can we convince the clients to purchase earlier? Little attention is paid to what is actually happening in the market and the impact of these knee-jerk course corrections.

In reality, the discussion is more focused on accounting than strategy.

This boardroom behaves as if the outside world exists in a steady state. The reality is that globalization and the Internet are breaking down the barriers to market entry.

Later that day, after instructing your executive assistant (EA) to shield you from distraction, you are surprised when he calls to inform you that there are four people asking for you in reception.

Irritated, you ask which company they are from. The EA mentions they are from a firm called Apocalypse. He adds that they are all on horseback. This is becoming surreal, but you persist and ask their names, and discover that War, Famine, Pestilence and Death are in the lobby.

Your mind races as you try to reconcile what you have just heard.

But then your mind takes you back to reality. You’re reminded that those guys in Silicon Valley are not only creating new technologies, they are creating new industries. They are using old industries as the raw materials. None of your colleagues seem to realize that if we are not careful, defeat will be the overriding theme of these boardroom gatherings.

We cannot rely on our scale and brand to survive. We are at War.

Our top line growth is decelerating rapidly. We are managing to fool the market by squeezing our costs so that it doesn’t show up on the bottom line. We are facing a revenue Famine. There comes a point where there is no more fat to cut.

This revenue famine is in reality a customer famine. We are increasingly unable to retain our customers. As more and more of the market moves towards a utilisation approach, our traditional ‘pump and dump’ sales model is creating more market friction than sales.

In fact, if we are to halt this famine we need to recognize that service is the new sales. This means everybody in the organization is responsible for customer experience. Customers are no longer the people we do things for, but the people we do things with. Whether consumer or enterprise, we need to think partnerships.

How did we get to the point of the unrealistic work demands of our employees? Worker empowerment is a form of Pestilence that has spread across the organization, and across the market. Certainly the war for talent is becoming more acute. However, there are plenty of candidates, but very few who have the capability to work without the comfort blanket of an operations manual.

Our best people are a Human Resource nightmare. They are creative and output oriented.  It’s as if they are driven by a sense of mastery rather than personal economic efficiency. Increasingly the line between work and life is fading. The new generation of worker has no problem with this, but they expect the arrangement to be a ‘two-way street’. Rather than trying to fix our talent, we should adapt to the reality that they are in the driver’s seat. We need to treat them like professional athletes and do all we can to attract and retain them. Currently they are simply shock absorbers for the panic-driven and increasingly clumsy boardroom decisions that my colleagues and I make because we don’t actually understand market reality.

Just because we dominated our market during the industrial era, does not mean that this is a given in the digital economy.

We need to be less arrogant and more fearful. We need to be able to spot subtle changes in the market. Our senses need to be as finely tuned as an injured animal listening out for approaching predators. Failure to hear the cracking of a fallen branch against the background noise of the forest may well mean Death.

Our organization’s ability to pick out the weak signals from the noise will increasingly be determined by the extent to which we make use of market sensors and analytic tools. This of course requires us to manage both our data and our information. It also includes an ability to manage our knowledge and wisdom.

Your line of thinking is broken by one of your colleagues gently tapping you on the shoulder. “Can I get you a coffee, you must have been working very late last night?” they say by way of justification for their gentle assault.

You call your EA, and inform him that you will now come down to reception to meet the four visitors.

“That won’t be necessary sir. They have just left the building.”

“On horseback?” you ask. “I am sorry sir, they were calling in respect of the feedback you asked for. Perhaps you misheard me?” came the reply.

Have you been dreaming? Like Charles Dickens’ Scrooge and the ghosts of Christmas past, present and ‘yet to come’, have you just been served warning of what lies ahead if your organization does not mend its way? Perhaps you have experienced an epiphany?

It’s time to break out of this fix the accounting ritual. You and the boardroom must start to reassess every aspect of your business and its role in the market.

Or face the four horsemen.


Ade McCormack is a near futurist, digital strategist, keynote speaker and author. He is a columnist focusing on digital leadership. He has written a number of books, including one on the future of work, (Beyond Nine to Five – Your Career Guide for the Digital Age). He has also lectured at MIT Sloan School of Management on digital leadership.

For more information on Ade, please visit www.ademccormack.com.


More Information: Digital Transformation requires new CxO skills and participation from the boardroom. Learn how to get your organization on the path for successful digital transformation.