High Frequency Change by Tom Cheesewright explains how businesses can ride the wave of change and not get swept away by the tides. In looking at why we feel like change happens faster now, and what to do about it, we hear from Tom about the changes seen on the high street and why they occured.
If you were at the launch of MusicNet, could you have forecast the end of high street music retail? Could you have predicted the end of Blockbuster when you first saw the streaming video? Or the end fo Nokia when you first tried an iPhone? Kodack after your first experience with a digital camera?
There are very few people who could have made these calls on day one. Even fewer who did. People who can see technology and translate it into the downfall of an industry, and are willing to bet money ad reputations o such disruption, are few and far between. Even those people most financially incentivized to make such predictions – venture capitalists – see their bets pay off maybe one time in 20.
In the case of HMV, Blockbuster and all the other big-brand cliches brought low by high-frequency change, there was no need to be the first to recognize what was happening. They did not need to see the future on day one. Their scale gave them time in which to make th hard decisions they needed to in order to survive and even thrive in the new world. But they did not, or rather they did not make the transition until it was too late -= in Nokia’s case, until the CEO famously identified the company was standing on a ‘burning platform’. Why?
There are multiple answers to this, but here’s an outline.
First, these companies were not looking to the future, at least not in the right way.
Every public company, or company fo any size at all, in fact, plans the year ahead as it is required. These short-term plans are typically business as usual” last year plus or minus a few percent, depending on the prevailing conditions. Most large companies also look to the distant future, 10, 20 or 30 years hence. This is a valuable exploratory exercise, though often not given the investment it deserves. Unfortunately, it is conducted infrequently, perhaps every five years.
Medium-term planning, covering the period in which hi-frequency change is likely to bite, is typically very poor., It is siloed into product or service areas, or it is entirely reactive, with change programmes built around external stimuli like regulation, funding cuts or competitive challenges.
Put simply, most companies simply have no formal mechanism to spot and address novel, existential threats on the near horizon.
The second issue is one of decision-making.
Power is often highly centralized in large companies, particularly power over strategic direction. And the information that decision-makers require to take appropriate action often moves very slowly through organizations and gets so polished on its journey that it loses a lot of its meaning. Decision-makers at the core of the organization are often so focused on their immediate firefights, and the threats of the competition they already know and understand that they are insulated from the realities at the end of the business.
The third issue is one of inertia.
Changing large organizations is hard, particularly when the company has been delivering the same services for a long time and those services have returned solid profits to shareholders. The financial and contractual bounds these companies find themselves in, having developed organically and optimized over the years to deliver today’s service, are often incredibly hard to break. Structurally, these organizations are often super-complex and deeply integrated with organizational charts that are either indecipherable or bear little relation to day-to-day reality. Breaking these organizations down to build them up again can cause so much disruption that the process might kill the business, even if it is in service to the right end goal.
High Frequency Change by Tom Cheesewright
High Frequency Change by Tom Cheesewright
About the book
About the author
The world’s first ‘applied futurist’, Tom Cheesewright enables companies to see the future, and respond with agility. A prominent voice in tech, consulting and brand-building spaces, he also appears weekly on BBC TV and radio (BBC Breakfast, 5live and Radio 4) as well as working with Channel 4 (Sunday Brunch, In the Future, Home Hero), Channel 5 (Saturday Show) and Sky News, the Guardian and Entrepreneur Magazine. Tom lives in the United Kingdom.
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