This document discusses how businesses can build agility to adapt to changing technological and social conditions. It argues that while the pace of change may seem disconcerting, fundamental human nature changes slowly. The key is distinguishing changes that genuinely impact your business from irrelevant noise. To do so, the author recommends surveying changes across seven categories that determine business value, from clients to systems to brand positioning. This will help identify where the business needs adjustment and where it can retain focus on core functions like good products and service. The overall message is that with the right strategic framework, businesses can thrive despite unpredictable environmental shifts.

1.
Building
an
agile
business
in
the
Connected
Age
By
Barry
Thomas
“The
sky
is
falling,
the
sky
is
falling!”
It’s
tempting
to
believe
that
the
sky
is
indeed
falling,
in
some
sense
or
another,
as
the
pace
of
technological
and
societal
change
continues
to
accelerate.
There
are
plenty
of
pundits
and
consultants
willing
and
eager
to
explain
the
bewildering
array
of
threats
to
your
business
that
are
emerging
on
a
seemingly
daily
basis.
But
is
the
sky
really
falling?
The
answer,
as
is
so
often
the
case,
is
both
yes
and
no.
It
all
depends
on
context
and
perspective.
Things
unquestionably
change
faster
now
–
even
though
the
1990’s
ended
little
more
than
a
decade
ago
it
doesn’t
seem
at
all
odd
to
refer
to
them
as
“last
century”1.
And
the
amount
of
things
that
we
notice
changing
has
also
gone
up
dramatically
as
more
and
more
of
the
(rapidly!)
developing
world
gets
plugged
in
to
the
daily
news
cycle.
Only
a
short
time
ago
we
didn’t
really
need
to
give
much
thought
to
Chinese
computer
companies
and
Indian
car
manufacturers
–
but
we
ignore
them
at
our
peril
now.
High
apparent
rates
of
change
are
unquestionably
disconcerting
–
a
high
rate
of
change
of
anything
in
our
environment
will
automatically
trip
a
fight-­‐or-­‐flight
response
in
our
brains
–
but
it’s
important
to
keep
in
mind
that
people
don’t
change
as
fast
as
mobile
phones
or
Chinese
demographics.
Our
phones
may
be
running
iOS5
or
Android
3.0
but
our
minds
have
much
the
same
wiring
they
had
when
Cleopatra
was
a
girl.
To
put
it
another
way,
there’s
an
old
Zen
saying,
“Before
enlightenment,
chop
wood
and
carry
water.
After
enlightenment,
chop
wood
and
carry
water.”
This
saying
can
usefully
be
paraphrased
as,
“Before
Social
Media2,
make
good
products
and
provide
good
service.
After
Social
Media,
make
good
products
and
provide
good
service.”
This
is
not,
however,
to
suggest
that
there’s
nothing
to
be
concerned
about
and
that
blissful
ignorance
is
the
way
to
go.
The
world
is
shifting
under
our
feet
in
myriad
profound
ways.
But
an
aspect
of
change
that
must
be
understood
is
that,
for
any
specific
business,
very
little
of
the
marketplace
noise
constitutes
actual
falling
sky
pieces.
Most
of
it
is
either:
• irrelevant
• relevant
but
benign
• relevant
and
a
great
opportunity.
If
you
want
to
survive,
manage
and
leverage
the
changes
that
actually
matter
it
is
important
to
understand
what
these
changes
mean
in
the
context
of
your
own
business.
You
need
to
construct
a
strategy
and
a
business
structure
that
is
going
to
be
agile
enough
to
adjust
w here
adjustment
is
needed
but
that
will
also
give
you
the
confidence
and
security
you
need
to
be
able
to
ignore
Chicken
Little.
1
Almost
a
quarter
of
all
the
goods
and
services
produced
since
1
AD
were
produced
in
the
last
ten
years
alone
-­‐
see
The
Economist
from
June
28,
2011.
2
Or
whatever
other
business
bête
noir
du
jour
you’d
like
to
insert.
©
2011
Shirlaws.
All
Rights
Reserved.
Page
1

2.
A
survey
of
the
battlefield
The
first
step
in
identifying
what
changes
are,
and
are
not,
important
to
your
business
is
to
get
a
big
picture
view.
To
do
this
we
need
some
kind
of
unifying
framework
and,
because
ultimately
we’re
trying
to
judge
potential
impact
on
the
value
of
your
business,
the
Shirlaws
Valuation
Framework
is
as
good
a
place
to
start
as
any.
This
framework,
amongst
other
things,
identifies
seven
distinct
categories:
Clients
How
many
clients
do
you
have?
How
loyal
are
they?
Staff
Do
you
have
good
staff?
Can
you
keep
them?
Systems
and
processes
Can
you
reliably
repeat
good
results?
Products
Are
you
more
than
a
one-­‐hit
wonder?
Distribution
How
good
are
your
networks?
Positioning
and
Brand
Are
you
well-­‐known
for/as
something?
Scale
Can
you
replicate
your
success
in
other
markets?
Broadly
speaking
the
further
down
the
list
you
go
the
greater
the
leverage.
Double
your
clients
and
you
may
double
your
business’
value
(i.e.
a
1x
multiplier),
but
show
that
you
can
reliably
churn
out
new
successful
products
and
your
multiplier
may
become
much
higher.
A
key
consideration
if
you
want
to
grow
your
business
value
is
deciding
where
the
greatest
return
on
investment
lies
within
this
hierarchy.
In
conducting
an
analysis
like
this
it
is
traditional
to
talk
in
terms
of
threats
and
opportunities
but,
to
continue
the
Asian
philosophical
references,
you
could
also
usefully
think
in
terms
of
Yin
and
Yang
–
that
is,
of
interconnected
and
interdependent
sides
of
the
same
coin.
Yin
Things
you
might
reasonably
choose
to
be
worried
about
include
(but
are
by
no
means
limited
to):
Clients
Connected,
impatient,
cynical,
novelty
seeking
and
above
all
informed.
• Client
loyalty
is
a
tough
thing
to
maintain
in
a
world
where
people
are
(a)
always
able
to
find
a
more
enticing
offer,
if
it
exists,
and
(b)
endlessly
distracted
by
cool
new
stuff.
If
what
you
do
has
been
at
all
commoditized
the
question,
“what
have
you
done
for
me
lately?”
may
well
be
enough
to
make
your
blood
run
cold.
• In
the
past
it
was
commonly
the
case
that
the
vendor
knew
more
than
the
customer.
This
informational
asymmetry
has
all
but
disappeared.
The
ever-­‐growing
utility
of
rich
social
networks
and
the
Interwebs
mean
your
customers
may
well
know
more
about
your
market
(and
even
about
your
product)
than
you
do.
• The
evolving
relationship
between
clients
and
vendors
closely
mirrors
how
the
public’s
relationship
with
mass
media
has
shifted
with
the
rise
of
the
Internet.
Where
clients
were
once
content
to
sit
back
and
be
broadcast
at
they
now
expect
to
be
part
of
a
conversation.
And
if
they
don't
like
what
they're
hearing
they're
entirely
willing
and
able
to
go
start
a
different
conversation
with
someone
else.
©
2011
Shirlaws.
All
Rights
Reserved.
Page
2

3.
Staff
Distracted,
impatient,
ambitious,
idealistic
and
assertive.
• The
challenge
with
staff
mirrors
the
challenge
with
clients.
Staff
today
can
choose
their
employers
in
much
the
same
way
they
choose
their
cars,
phones
and
washing
machines
–
with
full
access
to
effectively
unlimited
information
and
unfiltered
opinions
about
how
good
or
bad
you
are
at
“walking
your
talk”.
• Staff
can
also
be
fully
and
constantly
aware
of
their
true
value
and
of
their
employment
options.
It’s
no
longer
necessary
to
actively
hunt
for
a
new
job
–
the
Internet
can
do
if
for
you
and
regularly
deliver
job
offers
to
your
inbox.
Even
if
you’re
happy
in
your
job
it
never
hurts
to
keep
an
eye
out,
right?
• Gen
Y
may
be
the
most
cynical
generation
in
history.
They
may
give
you
the
benefit
of
the
doubt
but
once
you
lose
their
trust
(and
this
can
happen
in
an
instant)
you’ll
probably
never
get
it
back.
Systems
and
processes
Dynamic,
sophisticated,
flaky
and
permanently
unfinished.
• Expectations
of
product
quality
and
service
standards
have
never
been
higher
but
there
will
never
ever
be
enough
time
to
do
everything
right.
If
it
takes
you
a
year
to
build
a
new
system
or
refine
a
process
you
will
end
up
solving
last
year’s
problems
–
and
last
year
is
a
long,
long
time
ago
these
days.
• The
old
imperative
of
“make
the
sale”
is
being
replaced
by
a
new
one,
“collect
the
data”.
The
fact
that
you
sold
a
widget
to
a
customer
is
merely
a
starting
point.
Who
did
you
sell
the
widget
to?
Are
they
a
new
or
a
returning
customer?
How
did
they
discover
that
you
sell
widgets?
How
likely
are
they
to
buy
more
widgets
in
future?
Are
there
other
widget-­‐related
products
they
might
want?
Are
they
talking
about
their
purchase
from
you
on
Twitter
or
Facebook?
Are
they
an
influencer
in
their
social
network?
Are
they
likely
to
be
upset
about
you
collecting
all
this
data
about
them?
How
on
earth
are
you
going
to
make
sense
of
all
this
data
anyway?
Products
Awash
in
an
endlessly
creative
global
sea
of
competition.
• Do
you
feel
sorry
for
Nokia?
If
such
a
globally
dominant
provider
of
technically
excellent
products
can
be
utterly
derailed
by
an
upstart
with
no
prior
experience
or
credibility
in
its
industry
just
how
secure
are
you,
really?
• How
do
you
stay
ahead
in
a
world
where
everyone
is
innovating
at
crazy
speed
in
unimaginable
directions3?
• It’s
a
big
world
and
someone
out
there
is
probably
already
thinking
about
offering
some
or
all
of
what
you
do
for
free.
This
may
be
crazy
in
the
context
of
your
business
model
but
it
might
make
perfect
sense
from
their
perspective4.
If
you
suddenly
had
to
compete
with
free
how
would
you
differentiate
your
product?
3
To
take
one
small
example,
wouldn’t
it
be
great
if
using
your
phone
to
take
a
photo
of
an
unfamiliar
object
(a
bottle
of
wine
of
dubious
provenance
for
instance)
was
all
you
needed
to
do
to
find
out
everything
there
is
to
know
about
that
object?
Oh,
wait
-­‐
you
can
already
do
this,
with
Google
Goggles.
4
For
example
it
makes
sense
for
Google
to
give
Android
away
(because
it
drives
up
demand
for
mobile
search
and
the
attendant
advertising)
but
the
existence
of
a
good,
free
phone
operating
system
presents
a
huge
challenge
to,
for
instance,
Microsoft.
And
what
do
you
think
the
for-­‐profit
©
2011
Shirlaws.
All
Rights
Reserved.
Page
3

4.
Distribution
Dismemberment
by
disintermediation.
• iTunes
vs.
Tower
Records
and
Amazon.com
vs.
Borders.
Enough
said.
Positioning
and
Brand
Something
you
now
have
to
earn,
not
just
create.
• In
a
connected
world
your
reputation
is
by
far
your
most
important
asset.
Unfortunately
your
reputation
is
no
longer
something
you
create
(which
is
what
old-­‐
school
marketing
and
PR
was
all
about),
it’s
something
you
discover
by
listening
carefully
to
what
your
constituency
are
saying
about
you.
The
only
reliable
way
you
can
shape
your
reputation
is
by
actually
being
who
you
say
you
are.
• While
your
positioning
and
brand
are
harder
than
ever
to
shape
they
are
also
more
important
than
ever.
In
a
time-­‐
and
attention-­‐poor
world
your
brand
is
a
crucial
anchor
that
prospective
customers
use
to
categorise
you
as
relevant/irrelevant
to
their
current
needs
and
interests.
Scale
The
best
defense
is
a
good
offense,
or
“do
unto
others
before
they
do
unto
you”.
• If
you’ve
managed
to
identify
and
fill
a
lucrative
niche
the
chances
are,
in
this
hyper-­‐
connected
world,
that
someone
has
already
noticed
and
begun
copying
and/or
improving
on
some
or
all
of
whatever
it
is
you
do.
Their
next
step
may
be
to
scale
up
and
invade
what
you
currently
think
of
as
your
territory.
This
is
not
necessarily
a
bad
thing
(they
may
be
willing
to
pay
a
good
price
to
buy
you
out
for
instance)
but
the
initiative
will
have
clearly
moved
out
of
your
hands.
Yang
Things
you
might
reasonably
choose
to
be
excited
about
include
(but
are
by
no
means
limited
to):
Clients
Nearly
7
billion
of
them!
• Globalisation
and
the
Internet
have
given
us
the
capacity
and
opportunity
to
sell
to
very
nearly
anyone,
anywhere.
Not
only
can
we
easily
communicate
with
people
from
Kiama
to
Khazakstan,
we
can
also
cost-­‐effectively
rent
the
supply
chain
functionality
required
to
deliver
our
products
to
them.
• We
now
have
a
vast
array
of
new
ways
to
engage
with
out
clients
and
potential
clients,
to
turn
them
into
willing
collaborators
and
even
evangelists
for
our
products.
All
we
have
to
do
is
to
be
worthy
of
our
client’s
passion.
educational
sector
thinks
of
the
idea
of
“a
free
world-­‐class
education
to
anyone
anywhere”,
(as
brilliantly
offered
by
the
Khan
Academy)?
©
2011
Shirlaws.
All
Rights
Reserved.
Page
4

5.
Staff
Eager
for
something
to
believe
in.
• The
flip
side
of
the
cynicism
of
Gen
Y
is
that
they
are
also
desperate
for
causes
to
believe
in
and
to
fight
for.
If
they
believe
in
the
integrity
of
your
vision
they
will
engage
with
it
and
support
it
wholeheartedly
(they
will
also
hold
you
to
account
if
your
integrity
starts
to
slip
but
that’s
another
story).
• Good
staff
today
are
very
good
–
knowledgeable,
flexible,
imaginative
and
self-­‐
motivated.
Your
biggest
problem
may
simply
be
keeping
up
with
them.
Systems
and
processes
Rentable!
• An
ever-­‐expanding
array
of,
well,
just
about
anything
a
business
needs
is
now
available
on
demand
via
the
Internet.
In
some
contexts
this
is
“the
Cloud”
(broadly
speaking,
applications
and
services
running
on
remote
web
servers
and
accessed
via
web
browsers)
and
in
others
it’s
just
web-­‐mediated
outsourcing
(for
instance
ultra-­‐cheap
virtual
personal
assistants
operating
from
India
or
the
Philippines).
The
net
impact
is
that
the
capital
costs
(and
thus
the
risks)
of
setting
up
a
new
business
or
business
division
can
be
much
lower
and
start-­‐up
times
can
be
much
quicker.
• These
days
there
is
a
much-­‐improved
understanding
of
the
distinction
between
algorithmic
and
heuristic
processes.
Algorithmic
processes
can
be
best
implemented
via
explicit
instructions
–
i.e.
where
the
need
is
to
do
the
same
thing
again
and
again
with
minimal
variation.
This
is
where
Total
Quality
Management
and
its
ilk
are
most
appropriate.
Heuristic
processes
on
the
other
hand
are
ones
best
governed
by
intelligently
interpreted
rules
of
thumb.
In
such
cases
the
best
outcomes
are
typically
delivered
by
well-­‐trained
and
motivated
employees
that
have
the
autonomy
to
solve
problems
as
they
think
best.
Products
A
proliferation
of
niches.
• Two
powerful
trends
are
driving
an
explosion
in
the
number
of
distinct
product
niches
available
to
be
filled:
1. Customers
increasingly
take
“mass
customization”
for
granted5.
They’re
no
longer
willing
to
change
their
behavior
to
fit
the
product;
they
expect
a
product
or
service
to
be
configured
to
do
what
they,
specifically,
want.
2. Logistically
impractical
niches
(model
train
enthusiasts
in
Croatia,
surfers
in
the
Shetland
Islands…you
get
the
idea)
are
now
within
reach.
And
if
you
don’t
find
them
they
may
well
(via
your
web
presence)
find
you.
• The
increasing
opportunities
to
truly
understand
customer
needs
–
whether
via
social
media
and
other
forms
of
online
engagement
or,
more
controversially,
via
“big
data”
–
opens
up
limitless
opportunities,
“Companies
that
can
harness
big
data
will
trample
data-­incompetents.
Data
equity,
to
coin
a
phrase,
will
become
as
important
as
brand
equity.”
6
5
In
Shirlaws
language
highly
personalized
products
and
services
have,
in
many
markets,
largely
shifted
from
being
“extras”
to
being
“standards”.
6
See
Big
data:
the
next
frontier
for
innovation,
competition
and
productivity
and
The
Economist
from
26
May
2011.
©
2011
Shirlaws.
All
Rights
Reserved.
Page
5

6.
Distribution
Done
for
you,
if
you’re
worth
it.
• The
Internet
is
now
the
mother
of
all
channels,
and
what’s
more
it’s
self-­‐organising.
If
you
do
anything
that
anyone
cares
about
someone
will
blog
about
it,
create
a
user
group
for
it
or
assign
a
Twitter
hashtag
to
it.
Note
however
that
their
reason
for
caring
could
as
easily
be
negative
as
positive.
Positioning
and
Brand
Most
businesses
still
fail
to
genuinely
stand
for
something.
There
is
endless
opportunity
to
stake
out
some
high-­‐value
territory.
Your
customers
will
love
you
for
it
AND
they’ll
tell
all
their
friends
about
you.
Scale
The
world
is
your
oyster.
Turning
insight
into
action
The
single
most
important
thing
to
understand
about
this
(admittedly
superficial)
survey
is
that,
for
any
given
business,
most
of
what
I’ve
mentioned
is
simply
going
to
be
of
little
immediate
relevance.
In
reading
this
you
may,
at
most,
have
noted
a
handful
of
threats
and/or
opportunities
that
would
be
currently
actionable
by
your
business
today.
To
put
it
another
way,
there
is
plenty
here
that
is
interesting
but
probably
not
all
that
much
that
is
useful
in
the
context
of
a
specific
business
at
this
particular
point
in
time.
Directing
your
attention
and
energy
at
activities
with
low
marginal
utility
is,
as
always,
a
losing
strategy.
The
challenge
for
any
business
in
these
highly
dynamic
times
is
twofold:
1. Resource
allocation
–
that
is,
picking
your
battles
for
maximal
practical
result,
and
2. Maintaining
focus
in
a
noisy
environment
where
every
pundit
and
his
dog
will
tell
you
there’s
an
endless
list
of
other
things
to
worry
about.
It
is
perhaps
instructive
at
this
point
to
consider
the
example
of
Apple,
the
patron
saint
(if
a
corporate
entity
can
be
considered
for
sainthood)
of
predicting
the
future
by
inventing
it.
It
has
been
observed
that,
“…while
most
companies
have
a
tendency
to
fire,
then
aim,
Apple
is
diligent
in
assessing
all
of
the
moving
parts
of
a
strategy,
and
ensuring
they
have
extreme
confidence
in
both
the
viability
of
the
path
and
their
ability
to
execute
on
that
path…Apple
begins
with
a
3.0
vision
that
guides
1.0
execution.
This
‘begin
with
the
end
in
mind’
sensibility
and
patience
has
repeatedly
rewarded
the
company
and
its
constituency.”7
It
would
be
fair
to
say
that
Apple
understands
positioning
and
brand
as
well
as
any
company
on
the
planet,
but
this
doesn’t
make
them
slavishly
reactive
to
shifting
market
trends
and
public
sentiment.
On
the
contrary
their
defining
characteristics
appear
to
be
admirable
strategic
clarity
coupled
with
utterly
disciplined
implementation.
Clarity,
focus
and
discipline
are
not,
however,
inventions
of
Apple
Inc.
The
Roman
legions
had
it
all
in
spades
a
couple
of
millennia
ago.
We
can
all
do
it,
if
we
want
to
enough.
7
See
O’Reilly
Radar,
8
June
2011.
©
2011
Shirlaws.
All
Rights
Reserved.
Page
6