Flip (2 page)

• To keep pace with rising expectations, you can't just be fast, good or cheap, or even any two of these. Instead you must recognise and act on the fact that
  Fast, Good, Cheap – Pick 3
  has become the price of entry in every industry.
  
• To keep
  ahead
  of rising expectations and develop competitive advantage, you must learn that S
  uperficial is Anything But.
  
• To satisfy customers' needs for engagement and contact – spiritual, emotional, physical – remember that business is not business,
  Business is Personal
  .
  
• To win mass-market success, understand that
  There is No Wisdom in Crowds.
  The way to separate yourself from the competitive herd is by being courageous and creating new market space.
  
• To Get Control, Give It Up
  . You cannot command and control customers or talented staff. Instead you must empower and inspire others to create, dream and believe for you.
  
• Action Precedes Clarity
  – to move forward you must act in spite of ambiguity. Your action will create the clarity you're looking for.
  

Within each of the major flips, there will be more subtle ones. I hope as you read this book you will begin to see opportunities to flip in all parts of your business and life. More than specific examples of upside-down thinking, flipping is a philosophy. To be a flipstar like Richard Branson, Steve Jobs and Rupert Murdoch, to name a few, is to embrace the need for mindset flexibility. To understand that what was right for yesterday may not be right for today, and likely will be dead wrong for tomorrow. If you learn to flip, however, you will future-proof your organisation and your career.

That the world is changing is no secret to anyone (I hope). Pundits in every field talk incessantly about the constant change we are experiencing, to the point that 'change agen?' has become one of the biggest clichés of our time. But what specifically is changing? And why does it feel so pervasive?

Allow me to introduce you to the four forces of change completely redefining the way you compete in the marketplace, attract and reward staff, and even live your life. And then, through a series of flips, allow me to help you deal with these four forces of change. (The latter being more important.) This is not a book about the fact of change, it is a book about how to handle and profit from change. First, however, it is essential that we identify succinctly what is changing, because only then can we get more specific about what to do about it.

Here are the four forces of change I will be referring to throughout the book:

1. increasing compression of time and space

2. increasing complexity

3. increasing transparency and accountability

4. increasing expectations on the part of everyone for everything.

These forces are squeezing organisations and individuals alike. You can see them as enemies, the four horsemen of the Apocalypse that are ending business as you know it. Or you can welcome them as allies that are indeed changing the nature of business in challenging ways, but that can also accelerate your success and help you achieve competitive advantage.

None of the four forces is new. They've been around in one form or another at least as long as human beings have been creating complex societies. But there has been a dramatic shift in how the four forces affect our daily lives. They've never been in such a tight, immediate feedback loop as they are today. That's why the pundits can't stop talking about change and change agents. That's why organisations and enterprises all over the world are freaking out about these shifts. And that's why if you and your company get on the front foot and learn to ride the wave of change, you stand to reap massive windfalls. Just think of Toyota and the car industry–shifting Prius, or Apple and iTunes leading to the phenomenal sales of the iPod. Let's have a look at these four forces.

1. INCREASING COMPRESSION OF TIME AND SPACE

Outside of science fiction and the thought experiments of theoretical physicists, it is not actually possible to compress time or space. However, our perceptions of both are certainly malleable.

COMPRESSION OF TIME

Human beings have always been impatient. Today we count on things happening faster than ever before. And not just a little bit faster, but over the last few years a lot faster. The quicker something can be done, the quicker we expect it to happen, whether it's the movement of goods by overnight courier companies such as DHL, FedEx and UPS, the movement of people on flights from one side of the world to the other, or the movement of digital information from anywhere to anywhere via broadband internet (something that merits fuller discussion below). They all feed our insatiable need for speed.

Staffan B. Linder's book
The Harried Leisure Class
notes that as economic growth and affluence increase, 'the pace is quickening, and our lives are in fact becoming steadily more hectic'. This has formed the basis of a commonly discussed sociological concept: as affluence increases, so does pressure around time. Ask yourself, are you feeling a little bit of pressure around time? Consider the following example.

I was discussing this idea of compression around time with the partners of one of New Zealand's leading law firms. Afterwards the CEO told me how only a decade or so ago as a young lawyer, he typically spent an hour dictating a letter to a client. Then he figured on half a day for the letter to be typed and returned to his in-tray for signature before being put in the post box, two days for it to reach the recipient, two days for the recipient to draft and send a reply, and two more days for the reply to reach his desk – more than a week for a single exchange of business letters. Today, as CEO of his firm he types and sends his own emails, or a short message text on his BlackBerry if he's travelling, and he expects an answer later the same day, if not within the hour.

And this CEO is not some 'young twenty-somethin?' exhibiting the impatience of youth. Increasingly we begin our workdays not fully rested, because we got to bed so late the night before,whether from trying to get overdue work done or to have a bit of social life in the midst of all our other commitments.When the alarm first goes off, we hit the snooze button and go into what my mate Dr Adam Fraser calls mathematician mode, calculating the absolute last possible minute we can get out of bed and not be late. Then we race to catch an express train or bus to the office. Whether it's a blessing or a curse, technology frees us from the need to interact with anyone as we board; we just insert our prepaid ticket in the slot. When we arrive at work we mill about restlessly, waiting for the express elevator. Then we spend the day responding to the hectic demands of colleagues and superiors.We have two-minute noodles for lunch. And when we get home, we pop our instant dinner in the microwave and stand there thinking, 'Come on now, I have not got all minute.'

An exaggeration, perhaps, but I'm sure most people will agree it's only a slight one.

Unless you want to go off into the bush and be a hermit, there is no escape from the nearly instant communication and feedback loops represented by email, SMS and mobile phones. Whether we're talking about countries, companies or individuals, events that happen on the other side of the globe can and do have an immediate impact on our daily lives.

This is only half the story. It is not just that we want what we want faster, but that we change our mind about what we want more quickly.

Consider that the average time from concept to product in the US automobile industry is down from between five and seven years (about ten years ago) to around two years today. And what is ironic about this is that the US automotive industry is considered to be among the least innovative and slowest to change on the globe. It is competing with companies such as Toyota who bring entire vehicle ranges (Lexus and Scion) and new value propositions (hybrid engines) to market while most of their rivals are still trying to digest the fact that there might be a significant near-term profit opportunity in mid-priced luxury cars, customisable cars for Generation Y or eco-friendly engines.

Back in 1979, on its pre-PlayStation signature product, the Walkman, Sony went from product inception to product launch in under four months. Just recently, the PlayStation 3 has cost Sony millions because of delays associated with its launch. It was shown to the public at the E3 games convention in May 2005, but didn't hit the shelves until November of the next year.

By the time they got to market, the Microsoft Xbox 360 had shopped almost 10 million units, and Sony, a company that was once famous for its speed to market and relentless pursuit of first-mover advantage, lost almost $2.3 billion because of the late entry.

In summary, increased affluence and rapidly developing communications technology are compressing our expectation around time. If the late twentieth century was about doing more with less, then the early twenty-first century will be about doing more with less, faster!

COMPRESSION OF SPACE

Compression of the way we view space is shrinking the world. People no longer see geographical distance as a barrier to the way they do business. The world is the new market, especially in light of an increasing number of international free trade agreements.

Distances have always been relative to the time it takes to travel them. In our grandparents' youth, the other side of the world was weeks away.Now it is one day away by plane, or one second away given communications technology that makes it less and less likely that we actually need our flesh and bones to be on the other side of the globe.

My own business is an example of this. Daily, thousands of people from all over the planet log onto my website,
www.petersheahan.com
, and some buy products – some of which are digital and can be downloaded instantly – or subscribe to a free RSS feed that will help keep them on the cutting edge of new markets and trends. The point here is not to plug the 'Peter Sheahan Live' section on my site (although I am glad to do so
), but to point out that neither time nor geography poses any barrier to these transactions of value. I get visitors from countries I have never been to and sales from people I have never met. I am able to conduct transactions including delivery, even though neither I nor any other human is there to service the customer. My market is the world, and I consider myself a citizen of the globe.

Compression of distance means there are new markets to be serviced and new ways to service existing markets. It also means that there is more competition – the most dangerous of which may be some twenty-year-old at her computer in Sydney, San Jose, Seville or Seoul, who in less than a decade could dominate your market.

Now, it is important to put the current status of this change in the proper context. Pankaj Ghemawat, in the
Australian Financial Review,
argues that in many ways globalisation is overstated. Consider that, for instance, of all the phone calls made in the world only 10 per cent are international calls. And of all the investment in the world today again only 10 per cent is foreign (international) investment. In fact, in surveyed categories, 10 per cent was found to be the level of 'internationalisation' for just about everything.
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The argument that most economic activity is domestic production for domestic consumption has a lot of validity. But even if the direct international component of business holds steady at around 10 per cent, rather than rising significantly,we are all now competing against international benchmarks. In an increasingly connected world, customers are increasingly exposed to global trends and fashions. The customer's sense of what the neighbourhood business can do has irrevocably changed. Although people will always prefer to do business with people they know, like and trust (see chapter 4, 'Business is Personal'), they expect those people to deliver at a global standard of excellence, not a local one. There is no escaping the need to position your business today to compete – in real time and on demand – in the increasingly globalised world of tomorrow. Flips are a future-focused way of doing that.

2. INCREASING COMPLEXITY

Increasing compression of time and space fuels increasing complexity. Businesses are being hit from all directions – from above as they are saddled with dense and complex regulatory regimes; from inside with the challenges posed by the adoption of sophisticated new technologies and the explosion of information networks; and from below with the diversifying and intangible new demands of consumers. The uncertainty and ambiguity this complexity brings can induce paralysis that prevents innovation and positive action, and may in turn force the downfall of once great companies and careers.

Increasing complexity is being driven by, among others, the following six things:

• rapidly growing and increasingly connected networks of ideas and people
  
• disruptive technology
  
• explosion of choice
  
• increasingly intangible desires of the market
  
• increased sophistication of technology, systems and processes
  
• legislation.
  

RAPIDLY GROWING AND INCREASINGLY CONNECTED NETWORKS OF IDEAS AND PEOPLE

I've already mentioned increasing flows of people, things and data, but there's more to the story. Think of every person in the world as a node in a vast information system. Every node has different perspectives, ideas and desires from every other node in the system. Some differences are slight. Others are large. And a slight difference in one context may loom large in another context.

Now connect those nodes by all the networks – physical and virtual – that link them together: SMS, email, landline phones, mobile phones, express delivery, container shipping and transportation networks for people comprising motor vehicles, trains, ships and planes. These links criss-cross the developed and the developing world, and there are more of them overlapping all the time. Traffic on all these networks is constantly increasing, most notably in the form of digitised words, images and numbers moving at the speed of light.

A senior executive at Google shared some interesting statistics with me when I spoke to a large group of managers at Google's headquarters in Mountain View, California. Did you know, for example, that 20 to 25 per cent of daily searches on Google are unique? They have never been searched before – 25 per cent! This is not so surprising when you realise that 25 to 30 per cent of the web is new
all the time.
We are generating content – opinions, survey results, perspectives, ideas or just pointless garbage – so fast that at any one time more than one quarter of the world wide web is brand new. According to
Time
magazine, the world produced 161 exabytes (161 billion gigabytes) of digital information in 2006. That's the equivalent of over three million times the amount of information contained in all books ever written.
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