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Read our Strategist magazine online weeks before publication!

e-Strategy Pure and Simple
Chapter One
Strategic Fuzziness ²: Page Eight

The Transformation Of Business

As we have discovered in our strategy work with over 400 clients, a good strategy stays in place and works for company over a long period of time.

This strategy is usually deployed through four mechanisms which are distinctive to that company. These can be considered the "cornerstones" of that strategy and consist of:

 
• The organization structure put in place to manage the strategy
• The processes and/or systems used to deploy the strategy
• The skills and competencies that are nurtured to execute the strategy
• The compensation programs that reward people for executing the strategy

These four cornerstones of a business do not change frequently and form the basic foundation of any company’s Business Model. Most Business Models can accommodate a constant stream of changes over time. In fact, that is the sign of a successful strategy. There are some changes, however, that are of such a magnitude that they will impact the structure, or genetic code, of the enterprise and will cause a CEO to rethink that Business Model.

The Internet falls in this category. The shift to a new economy, brought upon by the advent of the Internet, will cause the CEO of every company on this planet to rethink its Business Model. The reason is simple: the Internet will have an impact on every product, every customer, in every market, in every industry, in every country on this planet.

To illustrate this point, the following graphic shows the migration of IT since its inception in the late 60’s to the projection that, by 2015, over one billion homes will be "wired" through the Internet.

The Internet will be to this century what electricity was to this past century and what steam power was to the previous one. Over the next 50 to 75 years, the Internet will infiltrate every nook and cranny of society...and business. And like electricity and steam, it will overpower the traditional ways we live and conduct business.

In every strategy session we have facilitated in the last three years, the Internet has shown up everywhere - as a threat, as an opportunity, as a vulnerability or as a Critical Issue. Most CEOs, therefore are conscious of the fact that the Internet will impact their business. The dilemma that they all share, however, is: "What do we do about it?" This question is not about whether they should do something or not, but rather about what to do.