Strategy: 5 Lessons Learned From A Decade Of Naught

Published on December 30, 2009 by R "Ray" Wang

I’ve had considerable time to catch up on reading this holiday season.  Traditionally, it’s a time for predictions, resolutions, and reflections.  But as we close out the last decade, I couldn’t help but dwell on economist Paul Krugman’s Op-Ed from December 27th titled “The Big Zero”.   He brings up good points that it’s been an “era best forgotten” and “it was a decade in which nothing good happened, and none of the optimistic things we were supposed to believe turned out to be true”.  He dives deep to rant about how we’ve achieved zero economic gains and makes compelling arguments.  However, in the world of innovation and adoption of disruptive technologies, it may be safe to say that his point on “our unwillingness, as a nation, to learn from our mistakes”, seems to be less true.

In fact, emerging organizational trends in the next decade can be well rooted in lessons learned through the boom and bust cycle of the 2000’s.  Here’s my opinion on five lessons learned from the tragedy of what we call the past decade:

  • Pace of change moves from constant to constantly accelerating. Quickly evolve or die.  Organizations need to find ways to stay ahead of change or risk being obsolesced.  Organizations must organize around supporting flexibility and agility.  Disruptive technologies play a role in leapfrogging organizational models, business processes, and business models.
  • Planning switches from static to iterative. Agile is the new poster child for today’s approach.  The best plans assume constant iteration.  Organizations must expect to reevaluate and assess plans in shorter cycles.  3 to 5 year plans can’t account for or incorporate the entry of disruptive technologies.  Iterations move from years to months.
  • Viability shifts from size to innovation. Size does not equate to viability.  Success requires solving pain chains.  Mergers and acquisitions will continue out of necessity but must be done strategically.  Not only must organizations achieve an economy of scale that reduces overhead, funds innovation, and grabs the largest share of the customer budget, but they must also address pain chains by developing and delivering innovative last-mile solutions that dis-intermediate inefficiencies in existing business models.  If size gets in the way, then you must divest.
  • Success evolves from technology adoption and process improvement to business value and business impact. Benefits should only focus  on business impact.  After a decade of technology and business process centricity, organizations must start with the business value story.  Business processes must be flexible enough to accommodate the pace of change.  Technology provides an enabler but not the complete solution.  People still matter at the end of the day so make sure the incentives are aligned.  Holistic goals such as the total customer experience, beyond real time relationships, and optimal compliance will provide the business drivers for new initiatives.
  • Collaboration evolves from nice to have to essential. Plain and simple – partnerships count more than ever. No single organization can serve every market, provide every last mile solution, and deliver value in a focused manner.  Most organizations can not afford go it alone strategies.  Partnerships must be based on an understanding of what each party will not do in order to find the common ground among 4 key dimensions: product road map alignment, service and support coverage, sales coordination, and community engagement.

Your POV.

What have you learned from the past decade?  Do you feel it was for naught or were you fruitful in your pursuits?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

  • Ray, your post is very thought provoking in looking back at the “Lost Decade”… Today’s nonfarm Payroll report really put into perspective what has been lost beyond the value of our retirement accounts. Although I have been, and continue to be a fervent advocate of innovation, it has come at a significant cost…

    Today’s U.S. nonfarm payroll report, when you consider the steroids government has supplied the economy, can only be described as horrible.

    We started the decade with a national payroll level of 130.8 million. We finished the decade practically unchanged at 130.9 million. Meanwhile, the total pool of available labor rose from 146 million to 159 million. In other words, we have the same number of jobs today as we did a decade ago, and yet we also have 13 million more people competing for them. It was more than just a lost decade for the equity market. It was a lost decade for the labor market.

    The so-called ‘employment rate’ — the ratio of employment to population — fell 58.2% from 58.5% in November and the cycle peak of 63.4% in 2007. This is extremely significant because what it means is that it would take an expansion in employment of 20 million over the next five years just to get back to those old cycle highs. But here’s the problem — the country has never before managed to come close to creating that number of jobs over a half-decade period, so what the future holds is one of ongoing deflationary labor market pressure as far as the eye can see.

    Labor market ‘gaps’ are widening; this is economist lingo that basically refers to the fact that slack in the jobs market is expanding, and this is why wage growth remains under relentless downward pressure. The unemployment rate stayed at 10% in December but it did so for a very bad reason. It was because the labor force plunged 661,000 in what was the sharpest decline in nearly 15 years. Without that dramatic disengagement from the jobs market on the part of the general public, the unemployment rate would have spiked to 10.4%.

    In fact, the U6 measure of joblessness, which captures all the various degrees of unemployment and underemployment, rose to 17.3% from 17.2% and is flirting with the highest levels ever for this figure.

    The losses of the “lost decade” have yet to bottom out as we begin the new decade. These losses will in all likelihood be the focus of the next decade.

  • One can often miss the important trends by analyzing an arbitrary period of time like a decade. The period of stress during this past decade has helped to highlight trends that might get lost in the noise. It has become clear that business is changing:

    – from command and control to matrix
    – from jobs to roles
    – from vertical to virtual integration
    – from waterfall to iterative processes
    – from linear to holistic thinking

    Technology is enabling these shifts. Virtual integration in development processes is now available thanks to Web 2 and open source tools. Collaboration is enabled through Web 2. Small technology companies can innovate because of the base of open source and commercial proven middleware. Many ‘economies of scale’ have become less relevant: supply chains and customers are no longer ‘owned’ by large vendors. Globalization has openned new markets – it’s no longer just leveraging the lower cost base. There are customers there. And, there’s innovation and competition.

    Technology companies should heed your views. An improvement to the economies of the G8 could fool us into thinking that not much is changing. That the naughts were of naught. Achieving competitive advantage requires these new ways of thinking. It requires the culture change to reorganize in a matrix, to accept input company wide and from customers, to accept that management doesn’t have all the answers, to become multi-national and multi-cultural… In particular – to question the assumptions of the past.

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