#4 Don’t you see it – or are you too comfortable to stick your neck out?
Updated: Mar 25, 2019
In summary
Growth is known to be the greatest value creator
The new world offers endless opportunities for growth
Then why is a majority of companies only predicting single digit growth ambitions ?
Where is the ambition ?
Among an analyzed data pool of almost 50 companies few have an ambition/predict an outlook of more than 5% growth.
Why are so few predicting single digit growth ? Are the majority of companies on the early part of the exponential curve - or is it due to lack of ambition?
The statements are all signed by either management or supervisory boards - all of which all must be familiar with the value creation drivers described either by BCG or others, which coherently underscores growth as the superior driver for value generation – beating strategies focusing on optimisation in terms of efficiency improvements and/or optimized use of assets by a wide margin.
Have the management and the supervisory boards forgotten about these drivers or explicitly turned their blind eye to them to support their choice of route? Either being:
Too focused on compliance to engage in radical innovation, i.e. focused on avoiding mistakes pointing toward the risk of losing licence to operate ?
Too comfortable or afraid to stick their neck out with ambitions significantly higher than the “norm” ?
Too early on the exponential curve to publicly announce a double-digit target ?
Or do they not see the vast opportunities in front of them… ?
Democratisation has created abundance of growth opportunities
Technological development reshapes our business dynamics
The question about ambition should be seen in the context of the new opportunities that lie just in front of us all.
As outlined in the previous blogs, the technological development has reached a point where multiple technologies have reach a maturity level - ready for application, as well as for business. More importantly ready to cross support other technologies further accelerating the speed of adoption.
These developments are changing the old text book business dynamics as we know them. New technologies are set free – they are democratised, which in turn create an abundance of growth opportunities for those with an idea to solve a problem: a higher purpose.
Removing the business barriers known from the old text book dynamics (Capital, IP, access to production, channel access etc.) opens the door for competition from angles previously unexpected – and at an unprecedented speed.
Apart from an incentive and a stamina to setup a new business – all it takes is an idea and an internet connection. Thus, imagine what can come from connecting up to 3 billion new people to the internet – which provides the gateway to the technologies) over the next coming 5 years…
The opening for competition – your opportunity
Open competition is at the same time an opportunity for you to develop new ideas into business of global scale. If you can release yourself from the norms; the company procedures and legacy and for yourself; challenging the comfortable seat of today – you hold the same opportunities as everyone else. With this lens, you are not bound by your industry, your capabilities nor your past – only your choice of route – your ambition!
The freedom to choose a path stresses the importance of leadership to choose what to follow and just as importantly what not to pursue.
Picture wise the shift to the world with democratised technologies can be explained as a shift...
FROM: playing soccer on a maintained soccer field including set boundaries (lines) – goals and rules
TO: playing at a dirt field. Here, there are no lines, no set goal and no defined rules. You seek your passion for playing. You can go whatever direction you want – as long as you show action, speed and do it with a purpose – most often to have fun!
Too occupied with compliance – or not the supervisory board’s role ?
We’ll get to it – after the compliance…
As discussed in a previous blog, I am often referred to the amount of compliance as the reason for taking a more active role on radical innovation when discussing the topic with board members.
With an immediate and well-defined penalty in terms of personal fines or worse – losing licence to operate board members are often court short term to focus on the immediate- and short-term issues. The problem being, that they don’t shift back – assigning time, energy and engagement in what will challenge the whole business – the challenge from newcomers entering existing businesses in new ways.
But it’s not the role of the supervisory board…
I often get referred to the commonly accepted precedent that supervisory boards should ensure that plans / causes of actions are in place – but not interfere in management’s “operational” work by engaging with the supervisory board’s personal involvement.
Whilst the precedence might hold for steering, controlling and developing the company and in terms of incremental- and adjacent innovation – only the supervisory board holds the mandate to decide on the topic implied in radical innovation.
With the decisions implied in dealing with radical innovation, fx change of industry (maybe even company charter), committed capital, engage Div-X to set up parallel organisation to prevent the organisational immune system from triggering – I see no-one else, but the supervisory board in a position to take these decisions.
Adding the speed of action required to respond to the decisions needed – there is no doubt in my mind that the supervisory board (and in most cases the chairman) need to take responsibility and engage personally on this task.
Too comfortable or afraid to stick your neck out ?
With the vast majority of companies setting the ambition level at par with inflation, I understand if supervisory board members evaluate pros/cons of sticking their neck out with higher than average ambitions.
If the majority of the market has set for low ambitions, why stick the neck out and risk a honourable recognition for good work – for setting high targets ? This might be the reason, that it’s mostly companies threatened by existence who become ambitious enough to target the true market potential.
If true, reality might in its own cruel way drive higher ambition to the supervisory boards. Statics are at least showing a coherent trend that more companies than ever are disrupted by others and reputed companies are going out of business.
My hope is that, more leaders will reach a profound understanding of the trends - and act upon the opportunities rather than let them become a treat.
At the same time, it might call for action from shareholders and remuneration committees to embed radical innovation initiatives into evaluation of the supervisory boards.
Yet too early on the exponential curve…
I have been caught by surprise when asking leader audiences about whether they have taken initiatives to reap the fruits of the new business world.
When asking the question in my leadership seminars, the statistic is around 4 out of 10 that have taken initiatives to reap the low hanging fruits of the new world. To my ears, a very positive trend – although I must admit that it punctuated my punchline the first 2 times :-)
If 4 out of 10 turns outs also to be a statistical representable figure for how many supervisory boards in general that have initiated sizeable projects to reap the fruits of the technological development, I am optimistic and hope that the companies announced growth figures soon will jump – only awaiting that the projects change stage from “Deception” (impatiently awaiting the doubling pace to reach meaningful values) – to “Warp” (when the doubling pace outpace what we can foresee/grasp).
…or don’t see the vast opportunities
Much has been said, predicted and even promised in the name of exponentials.
For most individuals it takes multiple exposures and time to fully consume, grasp and profoundly understand the impact of how the technological development is world changing- affecting almost every aspect of the world around and for us.
It’s a big mouthful to chew and whilst many have got the first exposure to what’s in process and awaiting us – a plausible reason for the low growth predictions could be that leaders are still in the process of digesting the new world.
Remember your first exposure to exponentials? For most individuals we each step from first exposure, to intellectual understanding to profound understanding and living it – are each giant ones.
What do you think is the reason for the low growth forecasts ?
The supervisory board is too occupied with compliance ?
The supervisory board is too comfortable to stick their neck out ?
Double digit is on the way – but too early on the “curve”
Reached intellectual understanding – but hasn’t translated into action yet
Another reason – please elaborate in the comments