Is your company fit for the future?

Businesses need to adopt a “Fast/Forward” approach if they are to succeed in a rapidly moving world, say Julian Birkinshaw and Jonas Ridderstrale

Authors Erik Brynjolfsson and Andrew McAfee argue we are entering the Second Machine Age, with information technology as the engine of human progress. The McKinsey Global Institute has called big data the “next frontier for innovation, competition and productivity”.

We take a different view. We believe the case for big data and advanced analytics is overstated. These will of course continue to be important techniques for staying in the race, but as information becomes ever more ubiquitous and search costs trend to zero, their capacity to provide any modern organisation with a leading edge is diminishing.

That’s not the only problem. Information overload at the individual level leads to distractedness, confusion, and poor decision-making. At a corporate level, we end up with analysis paralysis, endless debate, and a bias toward rational, scientific evidence at the expense of intuition or gut feel. As a result, many companies end up standing still, even as the world around them is speeding up.

Decisive action, emotional conviction

So what is the alternative to Slow-Motion Inc.? Thoughtful executives understand both the potential and the pitfalls of information. They recognise that the notion of competitive advantage is more fleeting than it used to be. They adopt what we call a “fast/forward” approach to business: they emphasise decisive action ahead of detailed analysis, and they are comfortable relying on emotional conviction alongside rational judgments.

For example, Amazon’s phenomenal growth defies all the established rules about firms focusing on their core competencies. Its success is built on deep insight into the needs of its customers and an assumption that if you create value for customers, growth and profits will follow. Jeff Bezos, the company’s cerebral founder, started his career developing mathematical models for a hedge fund, and is a great believer in systematic analysis. But at the same time, he is known for what Fast Company called “harrowing leaps of faith”. His most important decisions are not based on studies or spreadsheets; they are “nervy gambles on ideas that are just too big to try out reliably in small-scale tests”.