The 21st century company is different from an industrial age company. Industrial age company were characterized by stability partially enables through strong entry barriers and sustainable economic moats.
With the information age this stability that formed the bedrock foundation has vanished. Instead, we have entered an era of transformation, driven by the rapid pace of technological and social change. Many of those changes are interconnected. Entry barriers have declined across industries as a result of the impact that technology has on many industries, as well as due to the opportunity to outsource large parts of the value chain. The classic economic moat from the industrial age may not be relevant anymore. Not only have new entrants an easier time getting started; also existing players increasingly compete at arm’s length with products becoming commoditized quickly.
As a result, industries and business models of companies have become more dynamic than ever. This has a huge impact on the success factors of businesses. This means that the skills that corporations and humans apply need to constantly adapt in this era of transformation.
This new era calls for an update of how we think about businesses. As the structures of how businesses operate have changed, also business thinking must evolve and grow to meet the times.
Why do we need to adjust our approach to thinking about and analyzing businesses? Traditional business analysis in stable markets was built on predicting the future based on past developments. In today’s era of fast transformation, with quick changing markets the significance of historic data for our analysis decreases rapidly.
So how do we make assessments when there is less reliance on historic information? We need to focus on a different type of information. We need to focus on information that provides us with foresight. Foresight is the key imperative to navigate change.
To generate this foresight it becomes even more crucial to identify forward-looking metrics. But those metrics can only get us so far. We also need to learn to rely on less tangible clues. Less tangible clues may mean deeply understanding purchase criteria of customers with the empathy of a marketer. It may mean observing trends, of how customer perceptions change. It may mean understanding the strength of customer relationships. It can also mean understanding assessing a company’s culture and its ability to drive innovation.
To see those intangible clues, understanding the bigger context of the business becomes even more critical. Context means understanding different fields, from marketing to product development.
And this is what IRRlabs.com is about. Our first aim is to identify patterns of change, outlining the new rules of industries. But then we also level up your perspective to help you see the bigger context.
IRRlabs is for Forward Thinkers and Smart Decision Makers. Whether you are an investor, manager, or curiously minded business person. We will help you think forward and navigate industry transformation, helping you to organize your thinking about what drives the success of 21st century businesses.