If you ask most companies about their engagement with customers they usually cannot provide much data that is unrelated to the immediate sale. If you ask what process they're re-engineering, what they're manufacturing, or what they're optimizing, they can tell you in great detail. This type of information, as useful as it is in some contexts, fails to harness a fraction of the power of networks and leaves opportunities swaying in the wind.
Many boards of companies spend the majority of their time collecting, advising, interacting, monitoring, and analyzing the least valuable pieces of data because financial data is retrospective data. It is not prospective data. It indicates what happened yesterday, not what's likely to happen tomorrow. Social, networked data is pre-point-of-sale data. It is what people are thinking about before they buy something and this is the a key to maintaining your relationship with the customer in a networked world.
Most companies have biases around risks and investments. Research shows that companies say that they have a desire to invest in customer and intellectual property assets. But only 5 percent of companies are network-based, while 20 percent are technology-based. Three-quarters of all businesses are still in the industrial or service economy and continue to have a bias toward their traditional ways of measuring assets. Companies have the opportunity to invest in customer networks, but despite what they say, they continue to invest in people and IP.
They invest in more traditional assets because they know how to measure them and they appear to be less risky. A company's risk propensity can make the difference between those firms that are valued at eight times revenue and those which are evaluated at one-half or one-quarter as much.
Most organizations are in constant motion, apparently believing that activity equals accomplishment. But activity without a clear focus, and absent forward-looking data that illuminates the path forward, is simply a waste. Our research suggests that great companies have less activity. They know how to use the word "no."
Many of the best CTOs are excellent at saying "no." For example, consider the CTO who understands that her company is going toward the cloud, because that will offer the most flexibility. The CTO knows that the future is in open source. When nervous fellow executives want software that is both on-premises and off-premises at the same time, the CTO knows that the right answer is “no" since the company cannot manage so many versions of Microsoft across 10,000 desks.
The most difficult thing is to achieve clarity in the midst of noise. Organizationally, the initiatives, with their reports, and presentations, and metrics can generate more noise than signal. Sometimes the old saw is true: less is more.
Once a company gains clarity and moves toward defined objectives they then must decide what types of people they need to execute the vision and the types of competencies that are necessary to drive forward. Acquiring these skills and incorporating them into the organization is often an obstacle.
Innovative business models inevitably require new skills and in many cases the owners of those skill sets are people who are very different from the profile within the company to date. Just finding the right fit is a difficult and expensive exercise. Companies that build, as a corporate capability, the capacity to find, incorporate and leverage new skill sets will enjoy an advantage in a world of rapidly evolving business models.