Shorten the long run

In the long run we are all dead – John Maynard Keynes 
  
The economic concept of the long run is the period that it takes to be able to change every variable in a system.  It is the time it takes a system to adapt fully.  
  
The long run defined this way is a handy concept for an organisation to use when thinking about change.  Your most disruptive threats will pick the variables that you find hardest to change.  Because you cannot or will not change these variables quickly then you will be in danger of losing value to the disruption.  For example: 
 

  • newspapers: struggled to change an economic model where advertising in the paper funded content to attract an audience when internet businesses offered alternatives for both advertisers and audiences
  • music industry: struggled to change their ways of identifying and managing talent and the economics of distribution models tied to physical distribution when digital music distribution disrupted both
  • premium airlines: struggled to change high costs of labour, fixed cost infrastructure and the value perceptions of their other premium offerings when low cost competition attacked

  
If you want to improve your organisation’s ability to respond to disruption, you need to shorten the long run, your adaption time, by speeding up your slowest areas of change.  In most cases these will not be simple decisions.  The slowest areas of change are often those deep in the hidden infrastructure of the organisation.  

One thing you can do is invest in capabilities to help you change all areas of your business more rapidly:

  • people capabilities:  change leadership, talent, agility of structure and performance measurement
  • system capabilities: flexibility of systems, agile development, standardised integration and ability to leverage new technologies in experiments.
  • process capabilities:  continuous improvement, process measurement, agility of change, etc.

The long run is also the end of the period when the ugly impacts of disruption are felt.  We would all like to move faster through the periods of confusion, pain, adjustment & loss and get back to competing aggressively to win. 

Ultimately, it comes down to the culture in the organisation.  Can you build an organisation that has a long run that suits your business and its environment, where you can change the way you think and work fast enough to survive?

If you can’t shorten the long run, then you can guarantee in an era of disruptive innovation, your organisation will be dead.

Great advances are social

I was fascinated by this article on new research into the rise of the Mayan civilisation.  You might wonder why I post this article here and why you are reading about the birth of the Mayan civilisation.  The punchline is at the end:

“great civilizations don’t grow out of previous dominant groups like the Olmec, nor do they arise in isolation. They are the result of hybridization”

Hybridization requires the very human and social processes of conversation and exchange of knowledge to enable cultures to exchange information, ideas and technology.  

Our organisations need to be social and connected well with customers, community and the environment.  In our hyperconnected world, the pace of these interactions is increasing around us.  

If we are not engaged, we will be isolated while others advance.  That can only increase the danger of digital disruption.

S.O.C.I.A.L

Emergent Enterprise Social Networking Use Cases: A Multi Case Study Comparison by Kai Riemer and Alexander Richter of University of Sydney Business School.  

This study includes analysis of a NAB case study.  A great conclusion:

Most notable however is that this network shows an elaborate and more pronounced idea-generation practice than we have observed in other networks. A closer look at the content of these conversations reveals the benefit for the corporation when viewed from an organisational learning perspective. For example, in more than a quarter of all instances employees brainstorm matters of corporate strategy, work philosophy, working conditions and sustainability. Furthermore, people engage in dis- cussions about their immediate work processes, exchanging ideas that can be influenced and implemented by the employees themselves. Interestingly, there are also a number of conversations about improvements to or developments of new products and other customer-related issues. Finally, people discuss ideas for personal (skills) development and workplace learning.

S.O.C.I.A.L

Emergent Enterprise Social Networking Use Cases: A Multi Case Study Comparison by Kai Riemer and Alexander Richter of University of Sydney Business School.  

This study includes analysis of a NAB case study.  A great conclusion:

Most notable however is that this network shows an elaborate and more pronounced idea-generation practice than we have observed in other networks. A closer look at the content of these conversations reveals the benefit for the corporation when viewed from an organisational learning perspective. For example, in more than a quarter of all instances employees brainstorm matters of corporate strategy, work philosophy, working conditions and sustainability. Furthermore, people engage in dis- cussions about their immediate work processes, exchanging ideas that can be influenced and implemented by the employees themselves. Interestingly, there are also a number of conversations about improvements to or developments of new products and other customer-related issues. Finally, people discuss ideas for personal (skills) development and workplace learning.