What keeps you awake at night?
December 22, 2014
"It’s one mile from here to there.” The simple statement was unsettling even to the Disruption Tour participants who were no strangers to spaces larger than a university auditorium.
As the sheer size of the Tesla factory sunk in, I realized that it used to be the NUMMI plant. In the not-so-distant past, GM executives sang the praises of this joint venture between GM and Toyota, calling it the ultimate way to master lean manufacturing. At the same time, it was supposed to give Toyota the opportunity to gain a firmer foothold on American soil . Would the detailed GM and Toyota analyses from 20 years ago mention these buildings housing Tesla now? Isn’t it obvious? Does a stuffy Ampera or the downright ugly Prius even remotely quality as competition for the drop-dead gorgeous Tesla?
Organizations never thrive in complete isolation. In our study Competing in Changing Markets,we asked the following question:
How much of an impact do you anticipate these factors having on your commercial and marketing strategy in the next three to five years?
The table shows the percentage of respondents who answered “big” or “extremely big” to this question in the 2007/2013 period. At the top of the list, we see the usual suspects: economic context, product renewal, alliances, competition and so forth.
Elements that dominate the daily news such as ethnic diversity, ethical issues and internationalization are way at the bottom. On one hand, this is good: a demonstration involving 100 people in front of an embassy in Brussels or The Hague receives more air time than the success of our own enterprises. We are, it seems, hard at work teaching a population to lose sleep over global problems and doze off in response to the opportunities at hand.
On the other hand, as Confucius said: “If a man takes no thought about what is distant, he will find sorrow near at hand ."The Competing in Changing Marketsanalysis reveals many business leaders’ time horizon. Dormant trends can suddenly manifest with great force, both positive as well as negative in many cases. Business leaders end up blindsided not so much because of the speed of the trend but rather the sluggishness of the awakening process. From the myriad trends, we selected three that will affect the future of every company: digitalization, globalization and responsibilization.
The Disruption Tour participants felt like kids in a candy story during the visits to numerous California companies. The California innovation scene provides inspiration worldwide. The eccentric types and downright crackpots are often the ones who change the world. This is the land of Good Vibrations. The classic Beach Boys song invites comparisons between pop music and the California high tech scene: massive fragmentation, a couple of superstars, many losers and always entertaining.
The ones who dream are the ones who change the world. Google, Apple, Tesla, Ebay, Coursera: all California enterprises that show how rapidly digitalization is spreading. It was stated unequivocally during a visit to Singularity University:"No industry is safe." This is by no means hyperbole. The world is digitizing at a rapid pace. We stroll through Amsterdam checking museum hours on the Samsung TabPro, booking a rental car online to drive to Friesland, and make the hotel reservations on the way. Up until a few years ago, F1 racing had the exclusive privilege of being able to predict exactly when the storms would arrive. Today, we check buienradar.nl and can have our umbrellas open before the first raindrops fall.
The world has become a village. Globalization knows no boundaries. We have to explain to our kids what the Iron Curtain means, and why Skoda is no longer a toy car from a bygone era. Ted Levitt introduced the world to the term “globalization” in the early 1980s. To many at the time, a triumphant view of the commercial imperialism of the West prevailed. The world could be conquered with powerful standard formulas.
The believers of this simple world view now look dismayed. The direction of imperialism has turned. The Far East in particular has proved this. The Chinese Internet company Alibaba raked in 25 billion dollars when it went public in September 2014. Alibaba is no longer outfoxing forty thieves; instead, it runs online commerce. North of Florence, the very heart of Italy’s textile industry’s resilience is being tested by the estimated 5,000 Chinese companies that employ 50,000 compatriots. Working conditions are often substandard, but these companies manage to undermine the Italian population’s esteem and employment.
The uncurbed will and sheer effort that the Far East exerts every single day to improve life is inspiring. Knowledge potential is elevated to an ever-higher level. The Indian Institute of Managementin Ahmedabad has the most rigorous acceptance criteria in the world. Fewer than one out of every 1,000 applicants are admitted. Candidates take an Eastern philosophical view of this hurdle: "If we aren’t accepted here, we’ll go to Harvard.” The late Ted Levitt no longer roams the Harvard campus. He would have appreciated their guts. After all, the top-notch American university admits approximately 13 out of every 100 applicants.
The Far East represents the strength found in many new economies. Today, China annually produces more doctorates than any other country4]. Now that re-shoring is a household term, cheap production is only one of the winning cards. Innovative capacity is gaining importance. Limitations create strengths. Jean-Philippe Salar, the former head of Renault’s design department in Mumbai, put it this way: “India offers the ideal environment for designing new cars. New cars must be fuel-efficient, small and lightweight compared to cars from the last 10 years ."
We love great football. Götze’s superb goal during the World Cup final in Brazil was Germany’s reward for the outstanding game that the Mannschafthad brought. On the way to the finale they had humiliated host country Brazil 1-7 in match that instantly gained legendary status. The law of the jungle was upheld: eagles outclass canaries. Consequently, we are curious how host countries Russia (2018) and especially Qatar (2022) will fare.
Were you just as surprised in late 2010 to learn that FIFA had awarded a World Cup to Qatar? The Netherlands and Belgium had joined forces in a joint candidacy for the 2018 World Cup. The sand-covered nation of Qatar is home to scorching temperatures and extreme aridness. It is only one-seventh the size of Belgium and the Netherlands, and its population is 15 times smaller. Still, the country’s candidature was sufficiently convincing for chairman Blatter and his cronies. Later, when he was questioned during a press conference about possible bribery, he reacted as if deeply insulted: "Crisis? What is a crisis? We are not in a crisis. We are only in some difficulties, and these difficulties will be solved inside our family.”
To the horror of football players and supporters, the high mass held every four years to celebrate the beautiful game will take place in a sand-covered nation that should not be eligible to host it on ethical and infrastructural grounds. Football players and supporters must not complain; our lives are not at stake. In 2013, 173 Nepalese construction workers were killed while trying to build the mighty football cathedrals. Housing is wretched, working conditions downright dangerous and the workers are not allowed to leave Qatar at will. Wage slaves do exist.
The moral revival is underway. New segments of the population – smartphones in hand – will not put up with business leaders trampling the rights of other involved parties. Blatter will be held accountable.
The scene is changing. These changes test an organization’s stamina. For a business leader, every day is a trial. The changing scene is the reality in which we live. Shrugging this off with a joke during the presentation of a marketing plan may buy you some time, but it compromises the breathing space. Others draw up endless lists of opportunities and threats. Is this a sign of desperation, or are the list makers buying comfort?
When a Dutch company was shut down, one of the executives sent us the following email: "Although things are not going badly for us at the moment, accelerated significant austerity measures will be implemented. The marketing education and training that we embraced with such enthusiasm last year could also be affected. Typical, isn’t it, how the activities designed to make all the difference in the future so often end up on the chopping block. Or are such measures simply driven by intuition that is based on nothing? All hell has broken loose at our competitor, too. They have disappeared from the Netherlands. Nearly all of the employees have been given notice. If they want, they can apply for a similar job in Dubai, where the company will continue operating. Thanks to a lack of vision and courage on the part of management, a whole lot of people and their families are currently in serious trouble."
This brings us back to Levitt. Marketing Myopia, published in the Harvard Business Review in 1960, is a classic article that has defined the marketing sector. It asks the fundamental question: in which industry are you actually competing now? Levitt warned us about short-sightedness over half a century ago. Go ahead and ask yourself once again: which evolutions in the market are really keeping you awake at night? What will your customers miss if your company ceases to exist? Who will step into your role? When you have your answers, it is time to truly do something with these insights.
Research Briefing: Competing in Changing Markets was introduced by Rudy Moenaert and Henry Robben in 1999. This survey was conducted for the sixth time in 2013 (in cooperation with Peter Gouw). The extensive questionnaire, which has been distributed online since 2003, asks respondents about characteristics of their business, their competitive strategy and how they anticipate competing in the future. A total of 1807 responses have been received from executives and marketing managers: 169 (1999), 260 (2003), 317 (2007), 365 (2009), 339 (2011), 357 (2013). The survey method was fully standardized in 2007; consequently, we report the findings from that year onward.
Inkpen A.C. "Learning through alliances: General Motors and NUMMI", California Management Review, Vol 47 (4): pp. 114-136.
 De Greef J. "Wereld herdenkt de Chinese wijsgeer Confucius" [“World commemorates philosopher Confucius”], 28 August 2014. http://deredactie.be Few realize that the Beach Boys’ 1966 Pet Sounds was the inspiration for the Beatles’ 1967 magnum opus (Sergeant Pepper's Lonely Heart Club Band). These albums respectively occupy the second and first place on Rolling Stone Magazine’s prestigious Most Influential Albums list. Cyranoski D., Gilbert N., Ledford H., Nayar A. and Yahia M. "The PhD factory", Nature, Vol 472, 21 April 2011.  Wagstyl S. "Innovation: Replicators no more"; Financial Times, 5January 2011.  Understandably, we have refrained from mentioning the name of the organizations involved. We condensed the original email.