There was a time in South Africa when the CEO of a large company could call the regulator or the person in the highest office in government to tell them that there is a thorn (competitor) that is getting too big for their liking and should be shut down. Multichoice (a division of Naspers) operated like this before, causing the bankruptcy of new South African market players as it kept a monopoly on coverage and premium viewership rights of sports. Market conditions have changed and the business of undercutting or calling friends in order to bankrupt new players is not working as easily as before.
Agility to new trends is a requirement for the new fourth industrial order. Companies that typically struggle with this change are large, have many employees and have large capital outlays, what is typically called the cocktail of “too big to fail”. They love to remind the governments that preside over them that, if they fail a lot of employees will be retrenched (and become disgruntled voters), so their businesses must be well looked after by government regulation. Their CEOs say, let’s ignore agility and innovation and focus on employment, right? The sad truth is that no profit-making company has ever really cared about employees beyond achieving the maximization of profit (i.e. office coffee, aftercare, gym and flexi-time are not free).
So, then why is it that when the chips are down, all of a sudden, the discussion becomes about looking after employees. Interesting world we live in! However, we are not a union, we are capitalist ourselves so let’s get back to the issue of agility. Agility is understanding what the customer wants today, not what they were happy with 10 years ago. People ate anything before, now they want to know what is in their food, people got on any taxi before, now they want to know who the driver is, people watched whatever was on TV after hours, now they want to watch content they like on-demand, people booked in hotels for holidays before, now they want any safe place/home to stay in.
How many well paid CEOs even noticed this coming? Living in a corporate monopoly is like a worm in a mammal’s body that only realizes that the animal is dead when the food supply disappears. The truth is, large corporates can rarely be helped out of these predicaments as they will either size up any advise they get (“look at my revenue and yours effect”) or just adjust external advise to their liking (the management consultant likes my approach). The small to medium business sector has a chance to take some market share and with the support of the private equity and venture capital sector, they can learn how to grow and remain agile. Hence, private equity and venture capital funds have brought about the expansion of new technology driven sectors which are now in the mainstream.