Have you heard the story about the frog in hot water, who boils to death before he jumps out because the temperature rises so steadily he does not notice?
The internet and mobile technology have already brought about huge changes to society and commerce. As web and mobile savvy teenagers grow up, this change will accelerate.
The biggest media baron of them all, Rupert Murdoch has been quoted saying:
The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.
Rupert Murdoch is no doubt painfully aware of comments made by the 'Oracle of Omaha', Warren Buffett in May 2009 when he said he would not invest in newspaper businesses "at any price" because they (newspapers) "have the possibility of going to just unending losses". Buffett went on to explain that 20 years ago newspapers were essential to society, but this is no longer the case.
While Murdoch and Buffett ‘get it’ many business leaders (particularly in Australia) are failing to see just how quickly technology is changing the world, and just how different the behaviour of younger 'emerging consumers' is to that of their Baby Boomer and Gen X parents.
Stop and consider the fact that mobile phones and the Internet have only been part of our lives for around 15 years. Technology has changed every aspect of business and society, however we are still very much at the beginning of the change curve. Entrenched player's dilemma suggests that the biggest and most powerful companies are often the last to embrace change, only doing so when a tipping point is reached that gives them no choice other than to play catch up.
Can you imagine running an airline without online bookings, or a bank without internet banking? The ‘webification’ of these sectors will eventually spread to each and every part of every industry. This may scare the pants off some business leaders, however the efficiencies of connected computing have the ability to power the world through many more decades of reinvention and growth.
Regardless of the business you are in, creating value for your customers while innovating quickly is the best way to future proof your business.
The big record companies have learned the hard way. The ironic thing is that they’ve been there before, and last time they came out on top.
The CD revolutionised the music industry because there were huge advantages for consumers, including better sound quality and durability than records and cassettes. The world fell in love with CDs and millions of music lovers were inspired to repurchase their favourite albums in the new format.
Then the internet arrived but this time, major labels resisted the change. Instead of innovating to create value for both consumers and artists, they decided to protect, encrypt and lock up their music, making it less accessible. But even worse, they threatened to sue their customers. Only a monopoly could contemplate such a thing. As exclusive owners of their artists’ products, the majors are monopolies.
On the flip side, innovators such as Apple embraced the new technology, and forced through an incredible piece of disruptive technology. The iPod has transformed Apple into one of the great success stories in business history, for a second time. Thanks to Apple we're carrying all of our music everywhere we go.
Many brick and mortar companies (large and small) are now at the same crossroads the music companies were at a few years ago. Film and television, print media, paper-based classifieds and maps – all risk being superseded by new models and paradigms.
The laws of the universe suggest that all creatures need to change or face extinction, particularly when the environment around them changes.
The changes in communication and distribution mean a world of opportunity for innovators, and a world of pain for those who resist.
What are the likely paradigm shifts in your industry? Is your business positioned to surf the wave or swim against it?