Fast Change is the Name of the Game
By Amir Gal-Or
There are times when a high level of experience can make the difference between success and failure. However, in today’s fast changing world, some of the skills we have accumulated and the habits we have adopted over the years that have served us so well, have become less valid and practically speaking, less useful. Why is this? It boils down to one word: technology. The evolution of technology and its increase in sophistication and efficiency have made a direct impact on the process of decision making. The pace is faster, MUCH faster. As a result, the decision making tools we have traditionally relied on with full confidence have now become outdated and irrelevant. Time and time again, we find ourselves surprised by who is achieving success these days, including the types of businesses and those leading them. History is once again experiencing a change in global power in terms of industry and leadership. It is an ongoing process – one that does not rest.
Not too long ago, powerful companies such as Alibaba, Google, Baidu, Huawei, Facebook, Sina and of course Apple, were not yet part of our consciousness. Today, they rule - in terms of business but especially in terms culture. The domination of the smart phone coupled with the popularity of Weibo and Twitter have created a new culture of communication. Ask yourself, when is the last time you received a written letter in the mail? Bills don’t count – and even they arrive online these days. Global communication today is instant and immediate, both written and spoken. These same communications are also short and concise – and this is by design. Ever notice that these said systems only allow for so much space for your message? It gets things going quicker. And with Skype, communication has advanced even further, as it makes it possible to have visual contact as well as verbal. This reminds me of an American telephone company advertisement from years ago, when telephone technology was “it”. This particular telephone company argued that their service was “the next best thing to being there”. Today, that slogan applies to skype, as it is accessible to just about everyone and provides an opportunity to enjoy a visit, without actually physically visiting.
My family and I recently moved from Hong Kong to Mainland China. My son is to attend a prestigious university here and plans to study engineering. We were looking through some of the documentation and found that many of the terms students learn in the first two years are no longer relevant in the fourth year of study. Odd? Perhaps. But the point is, it is very difficult to predict the immediate future and foresee events that even though far away, will nevertheless directly impact your life and your future analysis, estimations and ultimately life choices. Take the earthquake, tsunamiand the nuclear power plant meltdown in Japan – this coupled with the collapse of the banking system and various governments in Europe – who could predict? But look now at how these events have changed decision making.
From my venture capital experience and to some level also from private equity, it became clear to me a long ago that star status is often fleeting when it comes to the portfolio companies. We have many investments and many portfolio companies. And, every year we produce a summary which includes a team rating defining which companies are the shining stars. And, every year, this seems to change. One year a company looks like it is at its end, ready to shut down. The next year, it is cited as the golden child of the lot and deemed the most promising. The bottom line: it isn’t over until it’s over. And there is always potential for a “dark horse” to sprint to the front of the pack in time to win the race.
A brilliant example of this is ProActivity, which developed a management software tool. Proactivity was a company whose sales were flat, even decreasing. The key employees started leaving the company, which was also increasingly losing money. Moreover, the company couldn’t secure additional funding. Fortunately the employees that left believed in the potential of the company and worked for free for six months. We, on the Board of the Directors, supported them during this time through active business development. We introduced ProActivity to the famous EMC CEO during a visit to Israel. It was a surprisingly great fit for the CEO’s new strategic plan and offering. Within two months ProActivity was sold to EMC for 23 million USD.
We must ask ourselves, how can we best quickly adjust to change and ‘potential’ change? I would argue that it is key to understand and remain open to some of the assumptions you may have had yesterday, but not to allow them to load you down, like a heavy weight. Understand that with each new day comes a new challenge, a potentially new environment, a new trend and sometimes even a completely new reality. Flexibility and open-mindedness are essential. Build your company in a way where it is possible to make quick decisions and implement in the same rapid pace. If this philosophy is built into the fabric of the company and is exercised even on a small scale on a routine basis, then when the big changes come along, quick decisions and rapid mobilization will not feel so foreign.
Let’s explore this point a bit further. On the global front IBM implemented an amazing change. They switched their business model from focusing on hardware, where the margins were getting lower, to a sophisticated, multi-disciplinary software/hardware service. They also sold their PC unit to Lenovo. Their timing in doing all of this was equally amazing. Had they waited longer to implement, quite frankly, it is very likely they would have gone out of business.
A concluding thought: they say that meaningful change first comes from within. If we need to be ready to implement fast change that will impact external events, then we must be willing to first look into ourselves, and make the changes necessary to building the power and the confidence to effect positive change around us.