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Are the Global Business Networks shortening the success cycle?

The first business book that I read was “In Search of Excellence” by Tom Peters and . It was a gushing account by two ex-McKinsey consultants truly in search of excellence among American businesses, and plethora of advise that to my then untutored mind (after all, I was still just an untutored merchant navy officer at that time) appeared rather obvious – for example walk around your operations to see what is going on.

What struck me most about the book was that in the intervening 13 years or so, between the time this book was written and I read it, most of the companies singled out as excellent by the authors were already in trouble. That impression – that companies once lauded as excellent can quite rapidly lose that mantle – has never left my mind as I read more than 5,000 business books, countless book summaries, business commentaries and news reports. Invariably each of these writings tries to generalize the key determinants of success from examples of certain companies. In more cases than not, those companies singled out as models of success falter in a few years times, sometimes victims of changing circumstances and at other times victims of their own success.

Today, it seems, that the success cycle has shortened even more. As George Colvin notes down in his recent Fortune magazine article (The World’s Most Admired Companies: Built for brilliance):

Success in today's economy seems volatile, momentary, evanescent. It's tempting to conclude that nothing lasts very long anymore. Yet that clearly isn't right; two of this year's top 10, Coca-Cola and IBM, are over 100 years old. The more accurate conclusion is that nothing today lasts very long without constant attention. That is a major change from 30 years ago. In an industrial economy based on physical products, plenty of things actually did last a long time on their own.

I think he makes a very good point in the article. Information networks have increased the speed of both – success and failure.

The speed of success has increased because you can use upside leverage of your business networks to to make up for your company’s weaknesses. The allows rapid deployment of new business models, and faster testing of these models in the marketplace. In that sense, your business networks may be even more valuable assets that your business infra-structure. After all, in the down half of the cycle your company’s physical infra-structure is always a millstone around your neck; just ask the airlines who have to park thousands of planes in the desert during recessions.

The speed of failure has increased too, because your competitors can outleverage you, using similar business networks. Beware of smaller, nimbler players with big business networks. They do not carry the overheads and yet can project their business power as far and wide as their much bigger competitors.

I discuss all these concepts in much more detail in my forthcoming book – The 5-STAR Business Networks – which will be released in April 2013. I invite thought leaders to contribute to the discussion by reading a synopsis of the book and providing feedback and recommendations – selected feedback and recommendations will be published on the book itself.

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