Did you know that in the past 3 years, we’ve seen:
- Encyclopedia Brittanica go out of print after 244 years
- Newspaper Ad Revenue surpassed by Internet Advertising after 305 years
- Number of Landlines surpassed by Mobile Phones after 125 years
We’ve seen the meteoric rise and fall of companies like Nokia, RIM, MySpace, and Groupon.
The average tenure of an S&P 500 company has dropped from 75 years in 1937 to just 15 years in 2012. At the current rate 75-80% of the S&P 500 will be replaced by 2027.
Technology advancement continues to shorten feedback loops, speeding up the game and competitive pressure in nearly every industry. If your organization is in technology, you’re probably towards the front. If your company is in industrial materials, you’re likely closer to the end of the long tail. But, the changes we are seeing will effect every industry, every organization, and every individual.
Perhaps the most shocking thing about this tech advancement is that the advance in computing power which is behind this accelerated pace is increasing exponentially. The pace of innovation over the next 10 years will be similar to the pace of innovation over the past 100 years. The data suggests that the next 25-30 years will be equivalent to the innovations that happened over the past 1,000 years — yes, one thousand years worth of innovation will be packed into the next 25-30 years.
The ability to succeed in the coming age will depend on being able to sense and respond in real time. However, most organizations are not built to operate in that type of environment. Leaders are aggressively grasping for answers as many of them are aware that the thriving organizations of the industrial age will soon be surpassed by a new breed of more agile and dynamic organizations.
A recent IBM study highlighted the 3 biggest questions burning in the minds of CEOs today:
- How do you deal with the increasing complexity of the planet?
- How do you run businesses that are “fleet of foot”?
And the top priority was:
- How do you promote creativity? How do you promote it and do it systematically?
According to research performed by John Hagel, 60 to 70% of headcount time in most functions is consumed by handling exceptions… things that get thrown out of automated processes. The very construct of rigid and linear processes is giving way to the reality that organizations are simply one layer in multi-dimensional complex adaptive systems.
When exceptions occur, employees scramble to find answers, to find the right people, analyze and understand the full picture, brainstorm, and then determine what to do. The good news is that we have unprecedented access to tools and cloud services to enable such responses. However, in a typical siloed, command and control, hierarchical environment, performing this exercise is extremely inefficient.
Knowledge workers operating in networked “next generation” enterprises will benefit from dynamic and personalized recommendations, relevant and contextual information, referrals to individuals, and richer communication possibilities, powered by predictive analytics, artificial intelligence, more data than the world has ever known, and broadband access that far exceeds yesterday’s wildest dreams.
The work to get there and benefits reaped are well underway. Data from 3 recent McKinsey studies confirm these benefits. Between 2009 and 2011, the top 3 areas where gains were consistently realized by companies leveraging Web 2.0 technologies were:
- Increasing speed to access knowledge
- Reducing communication costs
- Increasing speed to access internal experts
Here’s where the role of the CIO becomes so important for the next generation enterprise.
Information technologies are becoming increasingly important to organizational success (or even survival). While users and business units have recently taken things into their own hands by bringing their own devices, services, and cloud systems into their work efforts, circumventing the constraints and red tape of the firm’s IT department, they now run the risk of re-creating silos that firms have spend the last 20 years trying to break down. This (r)evolution provides a great opportunity for the CIO to help enable the unified holistic transition of the entire organization.
Organizations and CIOs who can create alignment between dynamic marketplace demands, organizational culture, and emerging collaboration technology have a tremendous opportunity to differentiate and sieze first mover advantage in a confused and fragmented marketplace.