Chapter 2
At odds with the conventional world
Two different mind sets
The concept of the business idea coming last is not easy for Industrial Age business strategists to get their heads around. Their mind set is to work out what is wanted and then to organise a way to get it. They need to have a target or goal to aim for: this provides the focus for their strategy. Without this goal or target they are lost.
In the Information Age, a completely different mind set is required. Instead of having a business idea and creating an organisation to carry it out, you start with the organisation and then search for a business idea that is ideal for the organisation to handle.
The situation is illustrated in figure 2.2 where the conventional, Industrial Age business strategy is shown at the top, with the bottom up strategy necessary for a highly volatile environment shown underneath.
Figure 2.2
Summary of the two different approaches to e-business. The conventional approach aims at planning a solution. The bottom up approach aims at searching for a solution
Industrial Age business thinking would expect a business to descend into total chaos and gross inefficiency if there is no planning or guidance. However, the overwhelming evidence seems to suggest that it is the conventional approach that is more likely to go off course and become unstable. This is because goals and plans seldom survive for long in the harsh realities of the information environment.
Unpredictable events are constantly occurring, necessitating plans having to be altered. As fast as contingency plans are drawn up, new technology, a change in customer expectations or surprising competitor innovations throw any new planning into total disarray. Frequently, this results in the rapid burn up of investment capital – killing an enterprise stone dead before it has achieved either stability or viability.
Perversely, when e-businesses fail through using an outdated Industrial Age approach, the Industrial Age mind set seldom recognises that it is the approach that is wrong. Nearly always the blame for failure is placed upon the Industrial Age methods not being applied strictly enough.
To understand how conventional Industrial Age strategies can produce spectacular failures it is worth looking back at the history of some of the early dot-com startups that came into being at the end of the last century.