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Memories and Dreams

By John P. Collins, CFPIM, CSCP, and Eric P. Jack, PhD, CFPIM, CSCP | May/June 2013 | 23 | 3

The world has became smaller as the price of transportation, then communication, fell dramatically. Likewise, the competitive landscape—particularly with regard to operational capabilities—continues to change incredibly fast. Are you behind or ahead of the changing competitive landscape?

The competitive landscape—particularly with regard to operational capabilities—is changing so fast that many companies are finding it difficult to retain their competitive position. While some would say this phenomenon always has existed, the pace of change and the root causes are different today, particularly in how they have affected several notable companies.

Operational gurus have highlighted this trend for quite some time. Published in June 2004, The Second Century: Reconnecting Customer and Value Chain through Build-to-Order discusses the difficulties experienced in the automotive industry as competition and costs converged to choke the profit from many and the life from a few. One more recent example of these missteps is General Motors (GM), which suffered from a series of seemingly myopic leadership decisions between 2006 and 2009. But due to a fateful decision by the US government to not let this company fail, along with timely compromises from big labor, GM was resurrected. There has been similar tumult in the PC industry, where once-vaunted companies such as HP and Dell were outflanked by their retail partners (think Best Buy’s Geek Squad), only for these retailers to be overcome by Amazon.

The World Is Flat: A Brief History of the Twenty-first Century asks the question, “Where were you when you discovered the world was flat?” By "flat," the author of course meant without the typical barriers of culture, education level, skill, language, and the like. Friedman describes three globalization eras. The first, referred to as Globalization 1.0, started when the world was shrunk by Columbus's discovery in 1492, which revealed what was previously unknown to Europeans. Around 1800, Globalization 2.0 began, lasting until around 2000. During this period, the key change agent was the development of multinational companies that went global. The world became smaller as the price of transportation, then communication, fell dramatically. Around 2000, the world shrank yet again, and the playing field leveled out even more. The dynamic force behind Globalization 3.0 is the newfound power of the individual to collaborate and compete globally. 

It’s important to recognize, however, that there still are “non-flat” places in the world. The difference between the flat and the non-flat can be compared to dreams versus memories: In the flat world, people have access to real-time, competitive information and thus can dream. But in the non-flat world, without this access (or without knowing exactly what to do with new tools and technologies), many are stuck inside memories of the way things used to be. Being motivated and armed with real-time competitive information helps you focus on how to compete and grow. It enables people in the flat world to adjust to an ever-changing landscape. In the non-flat world, however, many don’t have a credible basis with which to challenge the status quo. They are only motivated by memories of the way things were, and it is stifling. 

If you want to grow and flourish, you had better learn how to change and align yourself with our new, flat era. Do you know what steps your company is taking to remain competitive?

John P. Collins, CFPIM, CSCP, is president of Sustainable Solutions. He may be contacted at jcollins@ssi-spm.com

Eric P. Jack, PhD, CFPIM, CSCP, is dean of the School of Business at the University of Alabama–Birmingham. He may be contacted at ejack@uab.edu.

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