Katherine Fulton is a journalist, university lecturer and senior consultant with Global Business Network. She specialises in anticipating the future.
Fulton gave this interview to Brazilian journalist Rene Decol at last month's international Salzburg Seminar on "Journalism in the Information Age", where she was a key speaker.
What is the idea behind the Global Business Network? The idea is that the world is changing very rapidly, and none of us alone can keep up with the complexity of different fields and disciplines, and what really matters is the integration of understanding. We have meetings, online conversations and publications that are part of this network.
The particular service that we provide is scenario planning. It is a methodology that is replacing traditional strategic planning. Forecasting "the market will grow 5 per cent each year" doesn't work in a world that is changing so fast. The only sustainable competitive advantage in such a world is to learn faster than your competition.
The leading French sociologist Emile Durkheim once pointed out that people can suffer in times of rapid social change. Do companies also suffer?
It's kind of natural, most of us are afraid of change. When you talk about large organisations, it happens that people who run these organisations have been successfully good at the old rules of the game. It's difficult for them to let go what has succeeded in the past.
Take international leaders, for example. The leaders of many industrial countries of the world have been schooled in the time of the Cold War. All of a sudden, in a period of a few years, they face international political problems that are no longer defined by the rules of the Cold War. New rules are being developed. There are situations such as the Balkans conflict and it's difficult to deal with it because they don't fit in the old patterns.
The same thing applies to business, when the rules change in industries such as electricity production, which has been deregulated around the world, or telecommunications. People who run those companies were used to running monopolies. All of a sudden they have to be good in competition and innovation.
Are some companies more receptive to change and easy to adapt?
Companies that have already been kicked about a little bit. It's the same thing with people. If you are married and your wife leaves you because of the way you behave, it makes you change the way you behave, it gets your attention. When the person in the leadership position is open, wants to learn, doesn't assume that he or she has all the answers, is able to look to the outside world, that's a good environment.
Most countries, organisations or companies tend to spend most of their time internally focused. There is a discipline to get you to look at what we call the peripheral vision. Make sure that, in a disciplined way, you look much more broadly and deeply into the environment where you have to succeed. It's not about what you want to do. It's about what are the forces that will influence the environment.
Can we say that the most successful organisations are the most fragile ones in times of rapid change? Thinking about IBM, they were so successful that they couldn't realise all around them was changing.
IBM is a good example. One of the most successful companies in the world, and people were moving from mainframe to desktop computers, and IBM didn't take it seriously. When, very late, they tried to get in, they underestimated the size of the market by a factor of 1,000.
The impressive thing about Microsoft is that for a long time they didn't want to look at the Internet. Their first online product was the Microsoft Network, which is a proprietary, closed network. But they fairly quickly turned this enormous company around to embrace the Internet - and have done the same thing recently with Network Computers. First they denied them and now they embraced it.
So it's not always the case that the most successful will be the most fragile. In this case it has a lot to do with the leadership of the company. The real signal has to do with arrogance.
What about the size of a company? Some say that these days it's better to be small and quick than large and hard to move.
It's much easier to change and adapt if you are small. On the other hand, big companies have resources. So they can make multiple bets, while usually small companies are making a single bet and putting all their resources on a particular innovation that they think can become a big market. So, if it fails, the whole company fails.
There are advantages and disadvantages on both sides. We are seeing and will see more and more partnerships between large and small companies. In the pharmaceutical industry, for instance, there is a lot of innovation happening. R&D has been out-sourced in much of the pharmaceutical industry. There are a lot of small biotechnology companies around the world conducting cutting-edge research in partnership with a large company, which is providing capital and will eventually provide a distribution system for the product.
What are the basics of this change? Technology?
A number of things are coming together at the same time. There is certainly a lot of technological innovation, but there has been technological innovation through the whole century - actually, forever. But its pace has been accelerating.
In addition, you have deregulation, the opening up of markets, a political change. There is the end of the Cold War. We don't have too many pure communist countries left in the world. What is happening in Asia, what is potentially happening in Central Europe, is that all of a sudden hundreds of millions of people become consumers. People getting out of poverty want to buy things, so there is a pent-up consumer demand in various parts of the world.
If we put all these things together, it's possible to see that there could be a sustained economic growth at levels we haven't seen in a long time. Many things are uncertain but there is a sense that the rules of the games are changing. There are many industries we work with and no single one is not facing a sort of potential structural change in the nature of their business.
What about mass media?
One of the fundamental shifts is that there is now a potential for global markets. Media used to be very local. Then it could be national, when we had broadcast. Now it's international: there are some global networks and we are probably in the very beginning of this trend. Since satellites came in, there has been an exponential rise in TV around the world.
There are some very big players consolidating and trying to figure out who will be the dominant players in this global media distribution game. And probably there will be only a few players because you have to have such scale to succeed. That's one of the things driving the consolidation in the industry. And you have digitalisation of information, meaning that boundaries between old media will be unclear - you can have audio, video and print all together.
In 10 years it may not make any sense anymore to think that you are in the newspaper business, maybe in the news business. Maybe you have to produce news in different forms. The Internet will bring lot of new competitors for the newspapers. The monopoly of some newspapers to bring news in their area will be diminished.
Rene Decol is at: decol.dialdata.com.br
GBN's home page is at: http://www.gbn.org