Well then: who predicted that sort of year? It's been a big one, no doubt, particularly for those of us to be working at the storm front between the Industrial and Digital Economies. Without giving away too much, the Digital Strategy business I run grew doubled in size for the third year running, driven both by our increasing understanding of how to generate growth in the Digital Economy, but also by increasing buyer awareness of what good looks like. More on both shortly.
For my own benefit as much as anything else, I thought I'd document some of my lessons learnt in 2016. As ever, these are somewhat off the cuff and very much my own opinion. Here goes:
The pace of change is both much faster and much slower than we expect. Science fiction technologies like self-driving cars made astonishing progress in 2016, both in terms of their capabilities and public awareness of them. Similar gains were seen in advanced prosthetics, space flight, solar panels. On the flip side 'known disruptions', like that in retail banking resolutely failed to emerge despite the launch of a variety of 'digital banks'. Consumers don't seem to be interested in the marginal gains offered by these new companies, focusing their attention instead on adding new things to their service mix... even if that's just another Netflix box set or yet another social media/ messaging, service.
On the supply side, although the internal workings of Industrial Economy businesses still aren't changing with any great speed, the new wave of Digital Economy companies are yet to have a serious impact on them. Part of this is because there's not really much direct competition between pure Digital and Industrial, and part of it is because the size of the latter obscures the fact that some parts of their portfolio are suffering exponential decline. It's also true that the perspiration of staff is propping up businesses that would otherwise be declining: I suspect real productivity is down in terms of hours/ $ recouped. Sadly I suspect no data exists to back this up.
Strategy functions need to become more activist in order to successfully position organisations for the long term and generate short term growth. 'Strategy' and 'planning' have become rather conflated in businesses in the last decade. Part of this was a response to the challenges of the downturn, in which cash had to be carefully stewarded, but it's also true that in the years before Lehmann making money seemed so easy that making a business case for an acquisition was about as challenging as strategy got within companies.
That's no longer the case as the level of uncertainty organisations face is the greatest we've experienced since the Second World War. Strategy is therefore radically more than planning - it needs to be creative in generating possibilities and rigorous in managing risk. Doing the latter is basically impossible without strategists being able to get into the market and test the assumptions around their strategic choices. For that reason I'm beginning to believe that corporate strategy, innovation and venturing need to be brought together in a Strategic Growth function. Innovation and the launch of new ventures need to be done to test strategic hypotheses, not on the creative whim of an "intrapreneur' or a brain wave from a sales leaders. The right place for them to be owned is in Strategy... so now we need to reinvigorate the profession. A tough ask.
Possibly because of the above, there remain real issues with the quality of Digital Strategy advice being doled out to businesses. I sometimes get involved with businesses trying to execute strategies developed by other providers. If I see another 'strategy' telling people to wade into Big Data or create a 'Digital Culture' by 'investing in exponentials' I may well give up. Oh, it seems like trips to Southern California remain very much on trend. If you get offered one of these, don't do it. It's a total waste of time and money. Also remember that organisations like Singularity University intend to make money from you: it's in their interest to baffle and scare you. A visit to the crunch does not make you anything more than a tourist.
We've changed tack dramatically over the last three years, getting far more involved in the realisation of strategy through building ventures and in continuously evolving strategy by engaging in much longer relationships with our clients. But we're the extreme minority. Most of our competitors have never built an actual business, even if they talk a good game about The Crunch... sorry, The Singularity. I've given up talking about new technology and the scale of the change. I shouldn't be paid to reframe TED Talks. I should be paid (handsomely :) ) to create real growth and real change.
The last big thing I've learnt is about the immediate impact of the Digital Economy on the general population. This is a lesson broadcast loud and clear to all of us liberals who've had to watch Brexit happen and Trump come to power. It's a cry for help from a huge majority of the population who are facing the reality of their skills being no longer economically valuable. Unlike the last time this happened, they have the vote and the willingness to exercise that vote. Sadly they're also being exploited by career politicians without the wit to understand the long term issues or the authenticity to try and understand... and in the case of President Elect Trump and Mr Boris Johnson, ruthless self-promoters with askew moral compasses.
Some big revelations in the last 365 days and tantalising glimpses of what's to come in 2017. Much the same, no doubt. It's human nature to expect catastrophic change, as much as it's our nature not to see exponentials. But we're still amazing, empathetic beings and I reckon we've got lots of exciting adventures ahead of us. Happy New Year.
For my own benefit as much as anything else, I thought I'd document some of my lessons learnt in 2016. As ever, these are somewhat off the cuff and very much my own opinion. Here goes:
The pace of change is both much faster and much slower than we expect. Science fiction technologies like self-driving cars made astonishing progress in 2016, both in terms of their capabilities and public awareness of them. Similar gains were seen in advanced prosthetics, space flight, solar panels. On the flip side 'known disruptions', like that in retail banking resolutely failed to emerge despite the launch of a variety of 'digital banks'. Consumers don't seem to be interested in the marginal gains offered by these new companies, focusing their attention instead on adding new things to their service mix... even if that's just another Netflix box set or yet another social media/ messaging, service.
On the supply side, although the internal workings of Industrial Economy businesses still aren't changing with any great speed, the new wave of Digital Economy companies are yet to have a serious impact on them. Part of this is because there's not really much direct competition between pure Digital and Industrial, and part of it is because the size of the latter obscures the fact that some parts of their portfolio are suffering exponential decline. It's also true that the perspiration of staff is propping up businesses that would otherwise be declining: I suspect real productivity is down in terms of hours/ $ recouped. Sadly I suspect no data exists to back this up.
Strategy functions need to become more activist in order to successfully position organisations for the long term and generate short term growth. 'Strategy' and 'planning' have become rather conflated in businesses in the last decade. Part of this was a response to the challenges of the downturn, in which cash had to be carefully stewarded, but it's also true that in the years before Lehmann making money seemed so easy that making a business case for an acquisition was about as challenging as strategy got within companies.
That's no longer the case as the level of uncertainty organisations face is the greatest we've experienced since the Second World War. Strategy is therefore radically more than planning - it needs to be creative in generating possibilities and rigorous in managing risk. Doing the latter is basically impossible without strategists being able to get into the market and test the assumptions around their strategic choices. For that reason I'm beginning to believe that corporate strategy, innovation and venturing need to be brought together in a Strategic Growth function. Innovation and the launch of new ventures need to be done to test strategic hypotheses, not on the creative whim of an "intrapreneur' or a brain wave from a sales leaders. The right place for them to be owned is in Strategy... so now we need to reinvigorate the profession. A tough ask.
Possibly because of the above, there remain real issues with the quality of Digital Strategy advice being doled out to businesses. I sometimes get involved with businesses trying to execute strategies developed by other providers. If I see another 'strategy' telling people to wade into Big Data or create a 'Digital Culture' by 'investing in exponentials' I may well give up. Oh, it seems like trips to Southern California remain very much on trend. If you get offered one of these, don't do it. It's a total waste of time and money. Also remember that organisations like Singularity University intend to make money from you: it's in their interest to baffle and scare you. A visit to the crunch does not make you anything more than a tourist.
We've changed tack dramatically over the last three years, getting far more involved in the realisation of strategy through building ventures and in continuously evolving strategy by engaging in much longer relationships with our clients. But we're the extreme minority. Most of our competitors have never built an actual business, even if they talk a good game about The Crunch... sorry, The Singularity. I've given up talking about new technology and the scale of the change. I shouldn't be paid to reframe TED Talks. I should be paid (handsomely :) ) to create real growth and real change.
The last big thing I've learnt is about the immediate impact of the Digital Economy on the general population. This is a lesson broadcast loud and clear to all of us liberals who've had to watch Brexit happen and Trump come to power. It's a cry for help from a huge majority of the population who are facing the reality of their skills being no longer economically valuable. Unlike the last time this happened, they have the vote and the willingness to exercise that vote. Sadly they're also being exploited by career politicians without the wit to understand the long term issues or the authenticity to try and understand... and in the case of President Elect Trump and Mr Boris Johnson, ruthless self-promoters with askew moral compasses.
Some big revelations in the last 365 days and tantalising glimpses of what's to come in 2017. Much the same, no doubt. It's human nature to expect catastrophic change, as much as it's our nature not to see exponentials. But we're still amazing, empathetic beings and I reckon we've got lots of exciting adventures ahead of us. Happy New Year.
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