Why the high and mighty keep tumbling
“In “The End of Power” Mr (Moses) Naím, a former Venezuelan cabinet minister now ensconced at the Carnegie Endowment for International Peace, a think-tank, argues forcefully that rigid pyramids of power are collapsing. Micropowers are learning how to frustrate macropowers. Bigwigs are finding it harder to wield power and harder to hold on to it. The barriers that used to protect insiders, such as economies of scale and long-established relationships, are crumbling.”
Schumpeter, The Economist (16 March, 2013)
I see it every day. The formerly big and the once-powerful being brought to their knees. This is happening in business, in politics, in society in general; and it would serve any thinking person well to dwell on why it is happening. The Economist’s ‘Schumpeter’ column covered the work of Moses Naim recently in assessing why bigwigs are tumbling.
Consider business first. Not so long ago, BlackBerry and Nokia were amongst the world’s fastest-growing corporations; both are now in the throes of fairly desperate attempts to survive. The world’s biggest banks in 2007 are now either nationalized or shackled due to their own misdeedss. Even the mighty Microsoft struggles for relevance in a world that became ‘post-PC’ before its eyes. More recently Apple, itself the disruptor of so many industries, has suffered a stinging fall in its share price.
Governments are struggling to hold on to parliamentary majorities; unstable coalitions and fragile political deals are the rule across the globe. New, unlikely parties are popping up and taking significant shares of the vote. Monolithic labour unions are losing relevance. Chief executives are struggling to stay in charge; their average tenures are now nearly half of what they were two decades ago. Europe is in decline, as the BRIC nations flex their newfound muscles.
What gives? Mr Naim points out that people are, on average, much better off economically all over the world, and therefore more demanding; they are more mobile and more migratory; and more likely to focus on ‘me’ rather than be content to be part of a uniform herd. In addition, technology has allowed ordinary people hugely greater access to information and knowledge and increased their awareness of and interaction with the world at large.
But surely, you might reasonably object, we are just creating more behemoths? Don’t the likes of Apple, Google, Samsung, Amazon dominate so much that is new? Don’t the supposedly democratic new social-media platforms end up revolving around a few key influencers, thought leaders and celebrities?
Not so fast. Certainly, the tendency for things like market share and Twitter followers to grow very fast remains strong; but these new ‘leaders’ are much more fragile than before. Google may be the new market darling, but it was Apple just last year and may be someone else next year. Evanescence rules.
In Africa, this new reality is even more pronounced. Driven by the world’s youngest population and its fastest growing middle class, the African business and political landscape is changing more rapidly than any other. Africa’s established corporate and political giants may not have tumbled just yet, but they had better look sharp. The people they employ, sell to and seek votes from are going to be a much noisier and more demanding group.
The old are going to give way to the new; and the new are themselves going to struggle to stay new. It has ever been thus; but the timeframes have become dramatically shorter. I say this to every audience I encounter these days: rethink your fundamental assumptions about success, competitive advantage and longevity. Focus on having great products and great relationships. Incumbency alone will not protect you for long; you have to keep refreshing your appeal and creating value for newer markets and larger ecosystems if you are to survive.
If not, you may be the fool one of these day, and not just on April 1.