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Barbara Shannon explains why consultants and smaller businesses are poised to take advantage of the flow economy at the June 2013 Bay Area Consultants Network (BACN) meeting
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SHIFT Happens!
Including insights from John Hurley; John Seeley Brown; Lang Davison; Deloitte Center for the Edge; Robert J. Gordon; Tomas Sedlacek; Daniel Pink; Richard Florida
“What we’ve got at GM now is a general comprehension that you can’t run this business by the left, intellectual, analytical side of the brain. You have to have a lot of right side, creative input. We are in the arts and entertainment business, and we’re putting a huge emphasis on world-class design.”
GM Vice Chairman Bob Lutz
“There is more competition now than ever before. We keep a laser focus on our customers. We go beyond “process efficiencies”. Clear goals, great people, empowerment and trust move faster and better than too much process.”
Nike CIO – Roland Paanakker Interviewee – The DNA of Great Big Change
SAP Global Business Transformation Summit
Relentless growth = death!
But that’s un-American!
Topple rate for companies with more than $100M in net sales increased almost 40% over firms in the lower decile.
> 100M Sales
TOPPLE RATE (1965 – 2010)
Bigger is NOT better…!
ROA for US Companies(1965 – 2010)
Houston, we have a problem…!
Productivity isn’t helping…!
Low Increase Moderate Increase
High Increase In
crea
se
Stat
ic
Dec
reas
e
RO
A
Labor Productivity
Productivity isn’t helping…!
ROA and Labor Productivity Changes 1987 - 2010
WE’RE NOT IN KANSAS ANYMORE!
ROA of US companies = ¼ of what it was in 1965
Topple rate of largest companies is accelerating at three times the rate of smaller firms
Average tenure in S&P 1965 = 50 -100 years
Average tenure in S&P 2011 = 10 – 20 years
Growth in per capita GDP has steadily declined since 1972
The long-term trend is toward higher short-term stock price volatility
Wave One Wave Two Wave Three
The Shift Index 2011
The Shift Index 2011
Wave One Wave Two Wave Three
The Shift Index 2011
Wave One: Foundation
Digital Infrastructure Adoption vs. Previous Infrastructure Innovations
5X
2X
Wave One: Foundation
Wave One Wave Two Wave Three
The Shift Index 2011
Wave Two: Flows
Wave One Wave Two Wave Three
The Shift Index 2011
Wave Two: Flows
Wave One Wave Two Wave Three
The Shift Index 2011
Wave Three: Impact
Wave One Wave Two Wave Three
The Shift Index 2011
Wave Three: Impact
ROA for US Companies(1965 – 2010)
Topple rate for companies with more than $100M in net sales increased almost 40% over firms in the lower decile.
> 100M Sales
Topple Rate for US Companies 1965 – 2010
Low Increase Moderate Increase
High Increase In
crea
se
Stat
ic
Dec
reas
e
RO
A
Labor Productivity
ROA and Labor Productivity Changes 1987 - 2010
Flow, not productivity or size is what matters most now
Wave One Wave Three
“As technology and culture change make sharing knowledge easier, flows become increasingly important drivers of competition.”
Deloitte Passionate Workforce Study 2011
Worker PASSION drives FLOWS and can significantly improve firm performance.
PASSION Drives FLOWS
“When people engage passionately with their work, they seek ways to connect with others who
share their passion and who can help them improve faster.”
Deloitte Passionate Workforce Study 2011
1 – 99 100 – 999
1000 – 4000
5000
Worker Passion by Size of Firm Passionate Engaged Passive Disengaged
THEN
Size Matters
– Bigger is better
– Seeking Growth
– Acquire to Grow
Accelerate through efficiencies
– Structure to Scale Efficiency
– Product Driven Standardization
– Push
– Transactions
– Protecting IP
– Innovating on the Edge
– Hierarchies
– Performance Targets
Left Brain Centric
– Explicit Knowledge
– Pursuit of Excellence
– Performance Reviews
NOW Size Kills
– Too big and too fast fails
– Seeking Sustainability
– Organic Growth + Thoughtful Acquisition
Accelerate through relationships
– Structure to Scale Talent
– Customer Driven Customization
– Pull
– Partnerships and Trust
– Sharing for Value
– Innovating from the Core
– Meritocracies
– Purpose/Mastery/Control
High Value Skills
– Tacit Knowledge
– Passionate quests
– Real Time Feedback
WHAT’S DIFFERENT
THEN
Size Matters
– Bigger is better
– Seeking Growth
– Acquire to Grow
Accelerate through efficiencies
– Structure to Scale Efficiency
– Product Driven Standardization
– Push
– Transactions
– Protecting IP
– Innovating on the Edge
– Hierarchies
– Performance Targets
Left Brain Centric
– Explicit Knowledge
– Pursuit of Excellence
– Performance Reviews
NOW Size Kills
– Too big and too fast fails
– Seeking Sustainability
– Organic Growth + Thoughtful Acquisition
Accelerate through relationships
– Structure to Scale Talent
– Customer Driven Customization
– Pull
– Partnerships and Trust
– Sharing for Value
– Innovating from the Core
– Meritocracies
– Purpose/Mastery/Control
High Value Skills
– Tacit Knowledge
– Passionate quests
– Real Time Feedback
WHAT’S DIFFERENT
What Can Consultants Do?
“Recovery from the economic downturn within the Management Consulting industry is driven by human resources segments, niche consulting and the emergence of new consultants acting flexibly as independent contractors. Large consulting companies will face fierce competition from smaller, niche companies.”
Source: IBIS Management Consulting Market Research Report | NAICS 54161 | Apr 2013
Good News!
Left Brain Skills = Commoditization
Right Brain Skills = Differentiation
SHIFT to the Right
Mind the Gap!
GreatChangeBox.com
Gives Away Consulting Assets for FREE!
Barbara’s Big SHIFT
MARKET AND LABOR FORCES
Clients PAY for integrated hands on CHANGE MANAGEMENT designed to drive FLOW
STRATEGY
ALIGNED BUDGETS AND DEPARTMENT
PLANS
PRIORITIZED PROJECT
PORTFOLIO
WELL POSITIONED PROJECT
IMPLEMENTATIONS
COMPETITIVE PERFORMANCE
Integrating FLOW
4. Agile Project
Management
3. Now-Next-Later Prioritization
2. Aligned Plans 1. Voice of the Customer
Barbara’s Big SHIFT
HANDOUTS
WE’RE NOT IN KANSAS ANYMORE!
ROA of US companies = ¼ of what it was in 1965
Topple rate of largest companies is accelerating at three times the rate of smaller firms
Average tenure in S&P 1965 = 50 -100 years
Average tenure in S&P 2011 = 10 – 20 years
Growth in per capita GDP has steadily declined since 1972
The long-term trend is toward higher short-term stock price volatility
Wave One Wave Two Wave Three
The Shift Index 2011
The Shift Index 2011
The Shift Index is a data rich study by John Seeley Brown and John Hurley suggesting that a wave of change in the foundations of our business and society
is expanding flows of knowledge which is affecting corporate performance.
THEN
Size Matters
– Bigger is better
– Seeking Growth
– Acquire to Grow
Accelerate through efficiencies
– Structure to Scale Efficiency
– Product Driven Standardization
– Push
– Transactions
– Protecting IP
– Innovating on the Edge
– Hierarchies
– Performance Targets
Left Brain Centric
– Explicit Knowledge
– Pursuit of Excellence
– Performance Reviews
NOW Size Kills
– Too big and too fast fails
– Seeking Sustainability
– Organic Growth + Thoughtful Acquisition
Accelerate through relationships
– Structure to Scale Talent
– Customer Driven Customization
– Pull
– Partnerships and Trust
– Sharing for Value
– Innovating from the Core
– Meritocracies
– Purpose/Mastery/Control
High Value Skills
– Tacit Knowledge
– Passionate quests
– Real Time Feedback
WHAT’S DIFFERENT
