Technology is moving our world at hyper speed and most businesses are scrambling to keep pace – from how they engage with customers to how they plan, respond and position for the future. Every day, leaders – whether digital natives or business veterans – wake up to a new landscape and to new decisions for which there are no precedents. How do leaders navigate this increasingly complex world?
Success in the Digital Age depends on courageous leadership, transformative thinking, and a zero-tolerance policy toward internal silos that stand in the way of speed and agility. Because business-as-usual will be out of business within five years.
There has never been a time - in recent memory - when there was more pressure on executives to come up with new approaches to corporate strategy. Why? Because we’re living in the age of rapid, relentless change, with increasing volatility – economically, socially, politically, technologically.
But before we explore too much of the 'now', let’s back up to a simpler time.
Traditional corporate strategies are based on an implicit acceptance of traditional economic theories, the foundations for which were put forward in 1776 by Adam Smith in “The Wealth of Nations”. While Smith clearly got a lot right in his unprecedented economic treatise, the passage of time has exposed a few significant flaws.
One of Adam Smith’s foundational assumptions was that human beings, when acting in the marketplace, would make rational decisions in their own self-interest. We now know from behavioral economics that people make irrational decisions all the time. Confirmation bias, loss aversion, availability bias, and sunk cost fallacy are just a few ways consumers make consistently confounding decisions that impact market price, resource allocation, and our economy.
Another foundational assumption was Smith’s famous 'invisible hand'; the unobservable market force that would help the demand and supply of goods in a free market to reach equilibrium automatically, rolling them up to the benefit of society generally.
And yet here we are in 2017, with the impacts of the Global Financial Crisis of 2008-2009 still reverberating through our political and economic systems. It was people’s decisions in their own self-interest, when rolled up by the 'invisible hand', that turned out to be catastrophic at the aggregate level.
Let’s look at the speed of this change.
Very often the experimentation and change are slowed by an organizational fear of releasing anything that isn’t 'perfect'. Perfection is the enemy of productivity.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.