Competition at the Door: The future expands the pie for everyone, but competition comes in many guises

Thomas Friedman in his latest book, “Thank You for being Late”, brings out a very important point very early in his book.

He could be the quintessential New York Times columnist and the bestselling author of many books, but he is competing against a whole lot of people from far and wide; for all you know the Ethiopian Blogger, he frequented while picking up his car from the parking lot, who was a parking attendant during the day and a blogger at the night, could give a run for his money as this blogger was already read in thirty countries and had a diverse range of readers. Such bloggers abound in every corner, who have a way to tell their compelling stories and there are readers attracted to it.

Think of the times when Friedman was at peace with his work with only a few columnists sharing the pie of limited space in the print medium and only a handful of newspapers in the business of writing daily and weekly columns.

Compare that with the millions of blogs currently streaming almost anything on any subject from politics to sports. The readership has grown maybe hundred times, but the number of writers have grown several thousand times and keeps growing by the hour.

Most of the news is currently available in some blog or the other, long before it becomes a news in the mainstream. I recently found that the print medium was almost two days late in printing some news items. Such is the overwhelming speed at which information travels, thanks to digitization, internet reach and the costs at which information can be shared with an overwhelmingly large number of people.

Let me take Tom Friedman’s point a bit further. Not only are the current columnists under great threat of competition, almost every profession is waiting to be taken over by some unseen forces working incognito and from far enough distances. Why individuals, even functions are not to be spared; lock stock and barrel some functions are going to be under serious threat of competition from these web-forces of digital transformation now approaching from all corners.

Let me give some examples.

Imagine the old Procurement & Supply Chain Function, mostly done from every cost center, whether plant or head office or regional office or marketing office. There were procurement officers for every place. That is now replaced with one single central entity doing it for all. But that is the old model. With advancement of digitization this could well be done from any end of the globe.

If you were a maintenance engineer in a power plant or a control engineer, you never would know when the job could be replaced with sensor aided digitized controls from faraway places, which have far better understanding of when the next breakdown could potentially happen and what could be the best mitigation plan.

For all you know the quality control or the production function could be remotely modeled with far better knowledge of the nuances around product or process attributes in a dynamic objective function.

The power of digitization expands the pie, but it transfers the power from one end to the other.

Power moves from where the gemba (place of work) is to where the knowledge could be better aggregated and optimized using algorithms of all kinds.

Think of the old airplane and the travails of maintaining thousands of working parts and storing the data in history cards. How to retrieve such data was the key challenge. Today thanks to sensors you know when to replace and when to let it go and the data is all there in the clouds. The maintenance function is no more based out of every hangar all over the world and no one is busy sorting history cards.

Some things are changing very differently and is happening silently under our nose. The ability to connect people and machines in a way that could never have been dreamt of before makes almost every function highly vulnerable to competition of all kinds.

I could not think of a single function which could not be remotely executed far more efficiently; degree of difficulty could be different, but that is waiting to be changed by the desires and imagination of our current generation.

Resisting this is a no-brainer, how do we individually and collectively prepare to create value in this paradigm change is the key question to ask.