Crystal Balls and Coffee anyone?

I’ve just put down a book, Creative Problem Solving Techniques by James M. Higgins, which provided a few interesting thoughts regarding innovative approaches to challenge solutions. Great stuff this read, and while putting the book down it reopened at a list of assumptions the authors had made about the world at that time. I read them again and jotted down a few thoughts with a cup of coffee at hand. You tell me if my crystal ball thoughts are fair or if it’s just the caffeine talking. 

 The assumptions of the environment I was looking at was published in 1994, and a few additions to the description of drivers of change came to mind. The original text says the following.  

 1. Every facet of business is changing at an accelerating rate.

2. Competition is increasing.

3. Business is becoming increasingly global in scope.

4. New technologies are being introduced at a breathtaking rate.

5. The composition of the work force is changing, as are its members' values and expectations.

6. There are increasing shortages of resources ranging from water to skilled employees.

7. The U.S. economy is being transformed from an industrial economy to one based on knowledge and information.

8. Market and economic conditions throughout the world are extremely unstable.

9. Constituents, such as shareholders and environmentalists, are making greater demands on the organization.

10. Not only is the business environment changing rapidly, but it is becoming much more complex.

Change is inevitable, agreed, and will continue at a dazzling pace. It moves so fast that we only see and perceive it if we stop moving. In my own moment of pause I wondered, what were the primary changes from 1994 until now if change is so rapid and always accelerating? I had barely noticed or cared at a conscious level until then.

For one we are even more connected. Mobile phones are ubiquitous, Bit Chains and thingies, yep, my knowledge of those is that bad, connect us to entire supply chains and economic ecosystems. A bloated world of online data now knows a frightening amount about us, our spending habits, likes and dislikes and our social circles. This enhanced connectivity may be the death knoll of the multinational corporation as they are just too big and have rather slow “committee legs” to respond to that data and adapt quickly, particularly with local saudiences. Slick, lean and service oriented local providers could step in locally, providing tailored services and products to local audiences and capturing market from the mega corporate beasts. Their cost advantage with oil prices is obvious but their localized ability to provide delightful service levels could well end the era of the giant multinational servicing communities. Add that micro manufacturing is now possible on your kitchen table or desktop, in your garage or out in the yard. Production machines with CNC capability can make stuff from toys to vehicle components and they are affordable and relatively easy to use. Distribution through the shop windows of the internet makes every corner of the globe accessible. Trade winds have been replaced by air filled with trade.

It is here that individual entrepreneurial talent, enterprise skills and entrepreneurial competencies come to the fore. Professor David Gibson, a world leading academic specialist on entrepreneurship says that “efactors”, the entrepreneurial traits he has identified in his award winning research, could drive this change toward a new model for the worlds economic model. I agree with David and put enterprise skills enhancement ahead of any training course or coaching that I deliver to the small business leaders I work with daily. I am certainly tired of the McDonalds efficiency model above all else and could do with a whole lot more personalized service being available locally with people I know and can see face to face.

So localized customized production, as per the traditional trades’ craftsmen of yore, becomes possible and will kill the beast that slew them centuries ago. In effect the industrial age has built its own nemesis and a phoenix of exciting technically enhanced artisans will rise from the ashes to slay dragons.  Exciting stuff for business mentors like me who always support the underdog small business guys and gals.

2. I am not sure about competition always increasing. For whom exactly? The giant multinationals? Mom and Pop coffee shops and corner store operations?

For me, I see more of a change in competition style than in a numerical increase. Branding has become more important and can only be maintained if you deliver exactly what you say you do. Focus becomes key. China promised cheap and delivered to every corner of the globe. We kept buying as they had not promised us quality or differentiation. They said cheap and delivered on that. Job well done China. Forget to back up your promise to customers, even an implied one, and the world will soon know about it through the vast interconnectedness that is the market.

I read the third assumption about our world at least twice. It says, “Business is becoming increasingly global in scope”. At that time in 1994, it may have appeared that way as the multinationals entered their prime years. Not so much now, right? Small can really kick ass these days using the information age levers with their suppliers, employees, and clients. Yet global remains possible. It seems that the size entry requirement for being global has dropped right down, perhaps even to the scale of one woman or man at a desk or on a beach chair somewhere out there in the sunshine. So yes, to the assumption that business will become increasingly global in scope. However, I think the real winners will be those who can focus their strategy and deliver. A specialization at which no one can beat them, and at a local level customer service levels will outshine all comers. Don’t go cheap if you are small, go better, go local, deliver world class excellence, the technologies will let you do this. They are being introduced at a breathtaking rate which covers item four.

Take the next point lightly and you are in for a struggle. Put people first, “really first” as Simon Sinek says. There is big payoff potential here, particularly where delivery involves some portion of knowledge work. Remember technologies are driving all industries and knowledge workers run with and control the technology capability of any firm. Pay attention. Pay close attention to the composition of your work force and its members' values and expectations. Get it wrong for even a moment and you will be out of the game.

The next assumption on resource shortages is quite frightening. We have been using up all the easily available resources around us at a detrimental rate to our own well-being. Predictions of global warming, pollution, species extinctions and more fill the mind as you dip into social media. Simply put, those who conserve, reuse, and build longer life spans into products to minimize resource use are likely to be here when this list is reviewed again in another 28 years. Those who don’t wont. Environmental impact and competition for scarce resources will become fiercer. I think skills shortages could be solved in the ease of communication available and that those with scarce skills are going to kings of the Gig Economy.

The assumption that the US economy will transform from an industrial economy to one based on knowledge and information is fair and is still happening. Some of the rest of the world may be rolling out this change at a faster pace, others not. Will the coming energy crisis impact the global model the US economy is seemingly based on? Without oil transport of goods in bulk will be difficult or impossible unless new technologies emerge. Thus, local production and delivery comes to the fore. What form that will be in is uncertain. Licensed production? Production only based at the ideal source of raw materials? Perhaps areas high in one or another resource will become the new power houses running the world’s economy. Local processing of raw materials would, for example, allow South Africa to become a leading producer of mineral and agricultural goods and produce and produce all the jobs government seem unable to find but promise anyway. I read somewhere else that the next big wars will be fought for water and other resources. A scary thought, so we had better get a distribution system or barter and exchange market in place before it all kicks off.

I am unsure as to whether market conditions will remain unstable if decentralized production and service provision starts to take place across the whole world. Risks will be distributed and perhaps the system will become more stable. Certainly, those who created the events that led to the market crashes like 2008 will have less influence in such a distributed economic model.

Yip, shareholders, and environmentalists are having a louder voice in how companies are run. No argument with that.

Is the business environment becoming more complex? I somehow doubt this. It’s just so different that it may seem complex unless time is taken to understand all the new stuff. Familiar old things are gone, disappeared and up in smoke like printed bank statements or having to carry cash. The new model feels like we are reverting to a similar structure that existed just before industrialization. Small production centers, smaller cities, localized food, and resource consumption almost agrarian in nature but so much more than just ploughing the land, we can plough data and use technology to reach out of our doors to the far corners of the earth and bring forth products that we need all on our own.