Pt. 1 of 2. Is your CEO a frog?

In this first of two articles we look at how new age Entrepreneurs are using 21st Century technologies to build scalable multi-billion dollar businesses that are disrupting entire industries. In Part 2, with millions of jobs at stake as new market entrants continue to disrupt and break their older competitors we'll look at what legacy 20th Century multinationals are doing to try to turn back this tide of disruption and regain their status as global power houses.

You can see that the world around you is changing and you’d be forgiven for thinking that it’s happening at an imperceptible rate but it’s this very same perception that is catching, and has caught many of the worlds’ largest organisations off guard - in some cases wiping billions off of their share price and in others pushing them to the wall. There is an old teachers tale that if you put a frog into a pan of boiling water then it will jump out but if you put it into a cold pan of water and slowly bring it to a boil the frog will just sit there until it pops and, although many executives would hate the analogy the same is often true in the world of business because, as we’ve all seen, time and time again leadership teams, although they should know better, will all too often need a jolt to the system to wake them from their slumber and shock them into action.

In the past decade organisations have had to deal with a number of seismic shocks, ranging from events like the Global Recession in 2008 through to the rapid emergence of a slew of new disruptive technology platforms such as cloud, social networking and the advent of new mobile devices and unfortunately in the years leading up to these events, as we now all know, far too many Fortune 500 organisations had grown too comfortable with their place in the world and had seemingly adopted the status quo as their business strategy, meanwhile the water around them had been warming up for years - they just hadn’t been close enough to the markets to realise it.

The swings that took place, and the pain they bought which cost hundreds of thousands of people their jobs, have since been responsible for spurring many organisations into action and instilled a new sense of vigour that has helped create a new innovation arms race but innovation in itself is not a means to an end and spending billions of dollars on R&D is no guarantee that you’re going to create the next great product, in fact if there’s anything we can learn from corporate innovation it’s that spending hundreds of billions of dollars on R&D produces very few blockbusters but innovation, coupled with the right business foundation and vision now that’s a different story.

Innovation, or to give it another name, creativity can be taught and vision can be acquired but without the right business environment or foundation to support them both their impact on an organisations top line can be minimal and today the same technologies that were responsible for pushing some of the worlds’ most recognised and trusted organisations to the brink are now the very same technologies that are powering the new wave of global entrepreneurship and if you doubt that then official global figures tell us that in the past five years the number of new company registrations has risen ten fold to one hundred million per year and at the same time the number of new patent applications has risen six fold so why are these technologies which, on the one hand have proven so destructive to older businesses, been instrumental in helping entrepreneurs create a tidal wave of disruption?

Entrepreneurs care about two things – speed, of development and time to market, and burn rate and these new twenty first century technologies have helped them not just level the playing field but have helped them rewrite the rules of business. Between 1980 and 1990 only three start ups managed to break the billion dollar barrier within three years, between 1990 and 2000 it was just seven but in the past decade there have been thirty nine, just out of the US and each and every one of them, from Facebook and LinkedIn through to Uber and Tesla have used twenty first century principles to beat their twentieth century competitors.

If we step back just ten years a new company, whatever their industry would have had to invest hard won capital building IT systems – which are now all available on tap as pay as you go from the Cloud, hired office space - which teleworking is making obsolete,  hired staff locally – who can now be provisioned from anywhere in the world at lower cost and they would have burned capital designing and developing products and prototypes – which can now be made faster, cheaper and more effectively using technologies like software emulation, additive manufacturing and Platform as a Service then lastly they would have needed to create a sales and distribution channel – which is now a web portal and spent a lot of money on marketing – which is now next to free thanks to social media.

While we haven’t gone into any great depth here is it any wonder that these new agile start ups, built on twenty first century technologies and principles are out manoeuvring their older, more lethargic competitors? Today it can still take many larger process bound organisations up to two years to design and build out a new line of business but it often takes new age companies just a month.

Conclusion

These technologies and principles are not new but entrepreneurs have been effectively using them for the past five years now to increasingly fuel the fire that’s heating the pan of water and it’s only a matter of time until the water reaches boiling point and you don’t want to be the CIO or CEO who goes pop!