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You are here: Home > Rethinking Organizations > The timeframe of structural change

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Published on 2018-09-06 | Updated on 2019-04-03 19:19:21 | words: 1081


Technological change. Organizational change. Cultural change.

The first one usually takes less time, but without the other two, it is just new expensive clothing that is ill-fitting the existing organizational structure and culture.

Earlier this week I received an update from McKinsey: "why data culture matters", from the September 2018 issue of McKinsey Quarterly- it is a nice collection of few key elements and quotes from customers, listing also key pitfalls to avoid.

Worth reading- also if you do not necessarily agree with all its elements.

Now, change isn't just about data- but data is becoming a somewhat critical element, the main reason why the first concept within the title of this short post is "timeframe": think about future "data-centric businesses".

The idea that change doesn't just happen, but has to be managed, became a common concept in business over the last 30 years.

Albeit it seems that Business 4.0 is actually shifting back the balance toward the "exoteric", i.e. as if, whenever confronted with something that we do not understand, the "rational" approach were to be... to wait and see.

This 1,000 words post is just to share few concepts, as currently I am preparing the first issue of the new series of BusinessFitnessMagazine.com (you can read at the link the 2003-2005 issues, as updated and reprinted in 2013, or buy the book on Amazon).

The focus will still be change, considered under a systemic perspective, but the first issue will discuss change within a specific domain: our globalized society shift to Business 4.0 Now, let's move quickly to the other element: "timeframe".

There is an element that is worth considering: since the 1990s I saw change initiatives organized as if they were battleplans and you were still able to control and coordinate everything.

So post-WWII "command and control", an outmoded, control-freak attitude.

Search on Google something on the line of "technology adoption timeline", and you will see how telephones and cars took a while before they became available to the masses.

With Business 4.0, a zilch asset company can identify a missing link within a supply chain, create a website, connect demand and offer, and then both customers and suppliers will spread the word.

It is obviously more complex than this, but just imagine the density of interconnections involved, and have a look online at how long it took e.g. for telephones to become ubiquitous, vs. Pokemon Go.

And this bring about the third element- "structural".

If you prefer something "physical" but still within the "new business" domain, look at Uber or any of the others offering services using assets that belong to others.

There is an obvious difference: XX century telephones required new infrastructure, while most of the "new" businesses use existing infrastructure.

Another difference is the "pull service" ability: in the old times, no matter how much you wanted a telephone line, first you had to wait, then somebody would install it.

In the old times, "ecosystems" were built around various objects of affection, ranging from singers to motorbikes.

To make a long story short, let's consider an ecosystem equivalent to a community with a shared perspective and different purposes.

Modern ecosystems need more contributors than just a single company that decided to create the ecosystem to have an additional revenue stream for its existing product or service lines.

Recently, probably you too read and heard often the "culture" word used in various combinations, to refer to change in society and corporations related to digital transformation.

In business as well as in politics, often when talking about innovations, ranging from smart city initiatives (sensors everywhere, integrating citizens and electrical cars within the grid, etc.), the "timeframe" is considered a synonym for "depreciation period".

The early XXI century distorted our perception of reality: Internet-based services are but one element of Business 4.0, smart cities, widespread use of and integration of Artificial Intelligence.

The paradox is: if we really want to benefit from the potential of "new" technologies, we have to think again in terms of infrastructure.

Not just that, but also think that what we are about to build will deliver results at an accelerated, and have impact on the sustainability of infrastructure sustaining the existing business.

Now, move onto energy, communication, and transportation networks.

Some of the plans for a new future assume that more than states, in the near future it will be towns that matter.

Who will take care of that existing infrastructure and its maintenance, while the new infrastructure will be built?

Up to which point the existing infrastructure will be sustainable? And who will pay the transition costs, when it will start to be decommissioned?

Already in Norway new electrical cars are reported to be (depending on the source) at or above 50% of the new registrations, vs. combustion engine cars, while infrastructure to support the "new trend" (e.g. electrical charging stations) is sometimes unable to cope with demand.

That can be solved by further investments, of course, but leaves an open issue: what do you do with e.g. unused gas stations? And all the logistics and service industries supporting them?

And what about the integration of electrical cars within a town grid: where is the governance center?

Who defines the guidelines for development, collaboration, integration within the grid, and the remuneration model of all the actors involved?

Is there space for more than one model or ecosystem?

As for communications, we are used to have operators' antennas- but, actually, if most of the communication will happen in large, sprawling urban centers, a "relay" structure could be built from the bottom: do we need a new service model?

There will be a point where the old model would become unsustainable, but the difference vs. the XX century transition from coaches to cars, or from wood to electricity, or voice to telephone is that, at the time, the existing "infrastructure" could either be reused, or we had basically what amounted to a "greenfield" situation.

Better to start thinking earlier than later.