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Scale, Reach and Speed essential, but Manoeuvrability also must to taste economic success

Flexibility will be the bellwether of rising value

Rich Karlgaard
Published: Nov 3, 2014 06:10:07 AM IST
Updated: Nov 3, 2014 11:36:38 AM IST
Scale, Reach and Speed essential, but Manoeuvrability also must to taste economic success

I once asked the great football coach Bill Walsh why he drafted Jerry Rice, a little-known wide receiver out of tiny Mississippi Valley State. Rice went on to become the NFL’s all-time-best wide receiver. The NFL also ranked him the best player in any position. But in 1985, Walsh was alone among scouts and coaches in perceiving Rice’s potential as a future Hall of Famer.

“Rice was considered to be too slow for NFL greatness,” explained Walsh. “His time in the 40-yard dash was only 4.6. Most great NFL receivers run 4.4 or faster. But when you studied the film from Rice’s college games, you saw two things different. One: He could turn on a dime and run sideways faster than anyone. His manoeuvrability left defenders wondering what happened. Two: Rice always finished his pass route within one foot of where he needed to be, like he had a GPS in his head.

Quarterbacks Joe Montana and Steve Young could count on him.”

Rice’s abilities give us a clue to success in today’s economy. Scale, reach and speed are fundamental. But you also need manoeuvrability, even though you know exactly where you want to go.

Small teams are the key
Mass scale—and, with it, global reach—is a huge advantage, one that’s increasingly available to anyone. One of the digital revolution’s byproducts is that it creates excess capacity—and not just in all things digital. For example, what has caused the totally unexpected oil boom? Wasn’t the world supposed to be entering a period of “peak oil”, to be followed by oil shortages? The answer is found in technology. Extremely precise horizontal drilling far beneath the Earth’s surface has made it possible to tap new oil sources. This level of precision is made possible by advanced electronics, which was made possible by Moore’s Law. As oil billionaire T Boone Pickens told me, “You can drill 2 miles down, take a right turn, drill another 2 miles and pick the lock to someone’s front door. That’s how precise it is.”

The digital revolution has a tendency to create excess capacity in everything it touches.

As for global reach, you might wish you had an advertising budget of a billion dollars to tap the global marketplace. But no budget could cover it all because of the trillions of connections that exist among the billions of digitally connected customers. Fast-moving small companies can find more niches and customers than ever before. The same is true of technology’s power: The cloud is rapidly commoditising the availability of top-class technology. You can rent it by the minute from Amazon, Google and others.

Mass scale, global reach and powerful technology are, in sum, being commoditised. Manoeuvrability will be the bellwether of rising value. Such manoeuvrability will come from the combination of global reach, great technology and highly tuned and optimised teams of people.

This is the irony of our day: In an age of rapidly accelerating technology, the difference between a perpetually successful enterprise and a struggling, dysfunctional also-ran comes down to the people who make up those companies. Even more, it’s how those people interact as they form and reform into teams to stay manoeuvrable. Pat Gelsinger, the CEO of VMware, says “liquid organisation” is the only organisation that will work. He’s right.

Two executive roles within companies are sure to change: The chief information officer (CIO) and chief marketing officer (CMO). The CIO must figure out how to keep the company—and its vast numbers of manoeuvrable small teams—informed and flexible. CIO consultant Peter High writes about the weak link in most companies in his new book, Implementing World Class IT Strategy (Wiley). It’s a lack of coherence between corporate and divisional strategies and, worse, among divisions.
Manoeuvrability is chaos without such coherence. CIOs will need to fix that.

The CMO will spend less time communicating to the outside world and more time shaping the inside story. What else can hold a liquid organisation together but purpose, values and story?

Rich Karlgaard is the publisher at Forbes

(This story appears in the 14 November, 2014 issue of Forbes India. To visit our Archives, click here.)

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