What will be the winning strategies for leading organisations over the next decade?

LONDON: 15 JULY 2010
CIOs and other business leaders need to plan for a world where turbulence is the norm - and that means arming themselves with a portfolio of strategies that offer a flexible response to a wide variety of possible economic scenarios.

That was the message from Neil Cameron, the former CIO of consumer goods giant Unilever, leading futurist Rohit Talwar, and Mark Locke, chief architect of Fujitsu UK and Ireland, who were speaking at the latest Fujitsu Executive Discussion Evening in London.

Predicting how enterprise IT will need to change over the next 10 years is fraught with difficulty, Cameron suggested. "We're good at the grand macro views of the future," he said, "but we're not so good at the micro stuff," adding that it's easy to miss small details which can grow in importance in a very short space of time.

He cited the battle between Facebook and MySpace as an example of how the technology world has become increasingly unpredictable. As recently as 2007, he pointed out, the latter was the clear leader in the social networking market - with Rupert Murdoch's News Corporation prepared to bet $580 million on buying it. Now Facebook has left it in the dust to become the second most visited website in the world (after Google) with 350 million members.

"Who knows what went wrong there," he said, "but what’s clear is that we've got to learn to act fast, get in and get out quickly. Agility has become very important."

Cameron did, however, venture to predict four trends that would be top of the agenda for IT departments over the next decade: the ubiquity of cloud computing; the increasing importance of search; the consumerisation of IT; and the growing power of the consumer in business.

Referring to search, he forecast that video will become a major aspect of this. Within the next five years, he predicted, it will be possible to convert voice to text and embed this text inside video to make it easily searchable. "Cisco's view is that, in five to seven years, 85% of everything you store will be video, because it will be searchable," he said. Therefore, he concluded, the power of information can only grow. "In 2020, we'll look back and see the last 10 years as the decade when information came of age," he said.

And in the context of the growing influence of the consumer, he argued that organisations need to respect this new groundswell or face the possibility of rapid annihilation. "The power is no longer going to be with the retailer or the brand owner. Consumers are going to decide what they're going to buy, at the price they can afford and when they want to buy," he said.

"They'll also make up their minds about the environmental impact of [your products and services]. If companies aren't really careful about the way they behave and the way they're perceived, they're going to go out of business very fast. So not only is there a reduced barrier to entry into markets these days, there is also a reduced barrier to exit."

This is hugely important to people working in the IT space, he highlighted. "Because now a lot of the way you communicate, the way you sell your messages, the way you listen to what consumers are talking about, you do it through technology," he said.

Turbulent times

Speaking alongside him, Rohit Talwar, the CEO of Fast Future Research and author of influential bestseller Designing Your Future, also stressed the importance of being able to react quickly to changing events.

Predicting that we are about to live through "the most turbulent decade most of us have ever experienced", he said: "The challenge now is, how do we reconcile the turbulence we're in with the need to prepare for a fast-changing world?"

The answer, said Talwar - whose clients include GE, GSK, Nokia, Shell, Pepsi and the UK government - is a "portfolio strategy" approach. "We have to start to think about having a whole set of strategies available to us that we can turn to quickly - things that we can switch on quickly, and switch off quickly if we need to."

This necessity is created, he argued, by the fact that no one is able to make accurate economic forecasts for the coming years, and the most likely scenario is a pattern of intermittent recession in the developed world and variable rates of growth in emerging markets.

"So if you're facing this - different rates of growth, different opportunities in different environments - having a single strategy no longer works," he said. "You need to be asking questions like, 'What are the things inside our business that we know from the outset can be shut down quickly?'"

As an example, he pointed to the experience of French supermarket chain Carrefour as it expanded into Thailand. "They made a big investment but learned they couldn’t actually make it work. Yet they had structured that business to be able to close it down or sell it on very quickly. And that's been the plan from the beginning - to have an exit strategy."

Talwar also stressed the need to plan for huge stresses on access to resources. Referring to a recent EU report, he said: "80% of the revenue of manufacturing industry in Europe is dependent on various critical resources over which we have absolutely no control."

This, he argued, should make businesses extremely nervous. He urged: "Go back to your organisations and ask: 'What are the key resources we're dependent on for the growth of the business? How sure are we about our access to supply, and what would happen if the price of those things went up by 10%, 20% or 50% over the next five years? What would that do to our business model?'"

Uncertainty, complexity, opportunity

Planning for such uncertainty in a world of dynamic change was also the theme of the keynote speech by Fujitsu's Mark Locke.

He highlighted the fact that competition no longer necessarily comes from expected quarters. "If you look at someone like Amazon, five years ago you would have considered it an online bookseller - today it is [among many other things] an IT service provider," he said. "Or 10 years ago you might have considered Tesco a grocer - today it's also a financial services organisation. You need to recognise that the competition tomorrow is not always the competition today."

He also discussed the role ubiquitous IT and sensor-rich devices will play in creating an "intelligent society", that will allow organisations to manage limited resources more effectively, create new industries and spur the growth of multiple cloud services - both public and private.

Such change will force organisations to rethink how they operate, retain customers and identify new areas of opportunity. "The challenge will be to take those opportunities, while planning for complexity and uncertainty," he said. "So if it fails, you get out quickly."

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