Paul Witkay in Smart Business: “Prepare for the Next Evolution of Digital Technology”
June 01, 2016
The best CEOs are able to look ahead without losing focus on leading their organizations to high levels of performance today. Being able to see changes in their environment before they happen is the mark of visionary leaders.
Whether they lead large companies or new ventures, visionary leaders recognize that if they’re not thinking about how they can disrupt and transform their own industries, someone else will do it for them.
A sign of what may be to come can be found in “The Third Wave” by Steve Case, co-founder and former CEO of AOL, the first internet company to go public. Case was a true internet visionary — so when he looks into the future, I pay attention.
AOL was founded in 1985, but it didn’t hit full-speed until the mid-to-late 1990s. At its peak, AOL handled nearly 50 percent of all U.S. internet traffic. When I launched the Alliance of CEOs in 1996, only the Bay Area tech companies had websites, and many large company CEOs had their executive assistants print their emails for them to read.
Case believes we are entering a third phase of digital technology that is transforming our world in exciting ways that will require different strategies to succeed.
The First Wave of internet companies such as Cisco, Sun, IBM, IBM, Microsoft and AOL built the hardware, software and networks that were necessary to enable individuals to access the online world.
We remember AOL for stuffing millions of CD-ROMs into our mailboxes encouraging us to slip them into our computers and “Go Online!” This strategy worked, as AOL grew from fewer than 200,000 subscribers in 1993 to more than 25 million just seven years later.
The Second Wave began around 2000 when the next generation of internet companies were being built. Google became the dominant search engine, Amazon and eBay built the major e-commerce shopping sites, Facebook created a social network to unite people around the globe and Apple and Google took everything mobile.
Smartphone apps such as Twitter and Instagram enable us to share our ideas and photos instantly. Many Second Wave companies could be built with a minimum investment and were infinitely scalable by simply adding more servers and more engineers.
The Third Wave will be the Internet of Everything, according to Case. As everything becomes connected and integrated by the internet, we will be able to transform how everything works. Major industries such as health care, education, transportation, food and energy are already being transformed.
Case believes the Third Wave will require companies to more closely resemble the strategies of the First Wave when major investments in infrastructure were required. In other words, Third Wave companies will not be as easy to build as many Second Wave success stories were.
Unlike building mobile apps, transforming a major industry will not be done by a few solo entrepreneurs and smart programmers. Case envisions the keys to success in the Third Wave will be the “Three Ps.”
• Partnerships – Case quotes an African proverb that says that “if you want to go quickly, go alone. If you want to go far, go together.” Major industries have gatekeepers and new players will need to partner with major players to gain access to customers and establish credibility.
• Policies – Government regulations influence most major industries. Although Google may be able to design and engineer self-driving cars, they still must gain approval from transportation safety authorities. Uber is taking the approach to “ask for forgiveness rather than permission,” but this approach may not work in life or death industries such as healthcare.
• Perseverance – Third Wave leaders will need to walk a fine line between building companies that disrupt and transform entire industries while still being able to work with the major players and regulators who hold the keys to success.
Case believes that the Third Wave winners will not just be startups. The world’s largest companies are waking up to the opportunities (and the threats) that the Internet of Everything will create. However, while entrepreneurs are not necessarily smarter than the executives at larger companies, they are willing to take more chances and test more ideas.
Leaders of the Third Wave will need to make more bets and bigger bets to succeed. The results promise to be amazing, but the journey will not be for the faint-hearted.