How fast can you read this column? How quickly can you apply these thoughts to your business model? How soon does it take for your jaw to clench when business pundits hammer home the idea that you have to go faster, faster, faster?
I often wonder whether anyone else is fed up with the plank in the new-economy platform that screams that speed has become the most important force in business today. It's become a truism that the spoils in our wired economy go to the hyperactive, rapidly adapting, and fast-moving gazelles. You hear this in books such as "It's not the big that eat the small, but the fast that eat the slow," or even in recent articles that posit the coming of the "disposable corporation." To all of this I'd like to reply: Hold on a minute - or even two.
Isn't the recent dot-com carnage the result of scores of companies that aspired to get big fast or exploit first-mover advantage - and failed? Aren't there plenty of companies that have prospered by getting big relatively fast? I'm not arguing for lethargy or complacency here, nor would I praise the benefits of procrastination (though I do plan to write that column, um, real soon.) Rather, I'd like to make a finer distinction in the notion of speed as the premium force in the Internet Economy.
There's a better question than: How fast can we go? How about: What business functions and processes can we accelerate? And which ones should we not force? I'd like to propose that we refine the concept of business speed by adding the idea of business metabolism - the rate at which companies consume and process information, goods and other resources - to the equation.
The wired economy certainly has ramped up the speed and even the simultaneity at which companies share data, find customers or monitor production cycles and supply chains. And yet, while these changes are certainly speeding mechanical processes, there are certain corporate functions that resist hyper-speed.
The elements that often matter most in a business are human ones, and those are often the least resistant to acceleration. Can you learn, develop trust and establish relationships faster? Does wisdom scale? Can you manufacture epiphanies? Can you listen to customers quicker? I don't think so. The rate at which individuals and organizations learn, build trust and discover sources of value will always contain natural speed bumps. Ignoring those obstacles will have serious consequences.
Pure speed can be counterproductive. Having to start at 100 mph can force promising companies out of business before they find their niches. No less a sage than Peter Drucker, one of the world's most noted authorities on corporate management, argues that many entrepreneurial companies succeed in very different markets, with very different customers, than their original plans. "One can't do market research for something genuinely new," he said in his book Innovation and Entrepreneurship.
Most high-tech, high-growth companies need time in their early days to discover their unique values. They often cast about with different technologies, customers and business models before finding the one that delivers high value and high margins to a healthy audience of needy customers. Business models predicated on finding the market's sweet spot on first try are futile, as they leave no room for marginal improvements that respond to market feedback, and they force the company's founders to try to change the world rather than respond to actual market changes. The most successful companies are always customer-driven rather than producer-defined.
When the companies do land in the right zone, they should direct everything possible into an effort to dominate the space they're in. Consultant and author Geoffrey Moore, whose book Inside the Tornado has helped scores of leading technology companies grow implausibly fast by exploiting their market niche, agrees that the time of frantically throwing all available resources at growth matters is but a brief window of opportunity. When a company has successfully commercialized a technology that a groundswell of customers are actively adapting, it is at that point that they should be doing everything possible to dominate that growth, Moore said. Like fisherman throwing bait to sharks in a feeding frenzy, they should exploit that market by working feverishly and frantically to dominate the space.
"There's a limited time when people do adopt a new technology and if you don't get them your competitor will," he said.
The notion of speeding up selectively is reinforced by the research of Harvard Business School assistant professor Tom Eisenmann, who is working on a book concerning the relative merits of Internet time. Eisenmann refines the time question by distinguishing between strategic choices and organizational practices. In terms of strategy, he argues that there are a few specific conditions that create powerful incentives for companies to be the first movers in their respective spaces. Markets characterized by network economics, scalability and sticky customers, he said, call for getting big fast.
But Eisenmann distinguishes between getting big fast and getting it right first. He said some companies are spending time up-front listening to customers, developing infrastructure and working with players in the industry to develop the trust and relationships that help them grow and prosper.
Yet these insights can't be extrapolated to define every business and every businessperson. In the digital economy, competition isn't a quantitative matter, but rather a qualitative one. You can't accelerate excellence. You either have it or you don't. So while fast growth might be better than slow growth, manageable growth is best of all. Every company has its own metabolism, and the race goes to the companies that find and live by their appropriate grooves.