“He that is too secure
is not safe”.

Thomas Fuller

The Strategic Impact of a whole new Industry

Nowadays we love to talk about the impact that change is having in our society and in business in particular. Some authors (Ej. Gary Hamel) hold the argument that the pace of the change is unprecedented. According to these authors human kind has never experienced such amount of changes in so little time leading to a total disruptive change in management as a practice. Other authors (Ej. Jim Collins) think this disruptive change has been experienced before and, of course, forced terrible and disrupting changes in many areas.

We like to be especial but we probably are not. I don’t mean we are not being forced to change in a dramatic way but I tend to agree more with those authors that really think disruptive change has been here before.

I good example of a disrupting industry is Railroads. Exploring the selves of Baker Library at Harvard Business School, a catalog of a especial exhibition held here on this industry came to me and I couldn’t resist to share with you a few ideas that, in my opinion, support the argument that disruptive change has taken place before and that, as managers and educators, we can learn and extract enduring principals and not only fads that can help us to navigate secure. If we master those principles (strategic principles) we’ll be safe. Having a little perspective can also help.

The exhibition I’m talking about has the title of “Railroads. The Transformation of Capitalism.” Laura Linard, Director of Baker Library Collection attributes to Professor Thomas McCraw this: ”The building of the railroad network ranks as one of the most important developments in American history…By the last quarter of the nineteenth century, the railroad had penetrated every cranny of the economy and affected every person’s interest as did no other institution.” It seems it was a big change. In addition we can read Edward Howard in “A Railroad Study” 1877: “Among the social forces of the modern world the rail road holds unquestionably the first place. There is not a single occupation or interest which it has not radically affected. Agriculture, manufacturers, commerce, city and country life, banking, finance, law, and even government itself, have all felt its influence”.

We probably feel the same or similar threat with the changes of the internet in general and all new telecommunication industries in particular that felt the managers of the past when facing the rapid changes the new railroads brought with them. Many managers of the past were very successful and, as always, many were not able to adapt and succumbed. This is creative destruction like today.

In my opinion we need to be humble. I always say that Strategy is for humble people, those people ready to change, learn and adapt. It is not for arrogant managers that always claim success and always deny being the root cause of failure.

By Enrique Cortés PhD. Strategic Thinker-Advisor.


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