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The future of business is fast

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This post is an edited excerpt from “When Millennials Take Over: Preparing for the Ridiculously Optimistic Future of Business,” (Ideapress Publishing, March 2015) by Jamie Notter and Maddie Grant. The book identifies four principles that will guide successful businesses now and in the future: Digital, Clear, Fluid, and Fast. This excerpt is from the chapter on Fast.

You hear it almost daily in the business press: The pace of change has gone through the roof, and our organizations are not keeping up. A strategic window opens up, but the organization can’t pivot fast enough and loses out to that creative new startup. The development of new technology being used both by our competitors and by our customers makes it almost impossible to stay ahead of the curve, and we find ourselves scrambling to keep up. Executives stay up at night worrying about speed, or the lack thereof.

Speed, of course, is a key variable in any calculation of productivity and efficiency. The cost of your widget factory won’t change once it gets built, so the faster you can get widgets to roll off of the assembly line, the more productive and profitable you will be in a given period of time. If you run a call center and can shorten your average call time, you are able to handle a higher volume of calls with the same number of staff. Speed almost always translates into cost savings or increased profits. From many different perspectives, faster seems to be better.

Invest in Speed

Speed does come at a cost, however. We’ve all heard the warning from consultants and other service professionals: fast, good, or cheap—pick two. If you want things done very quickly (fast) and you want high quality (good), then you should expect to pay more for that (not cheap). Or, conversely, if you want it fast and cheap, that’s fine, but you’d better lower the bar in terms of quality. Speed always requires tradeoffs.

But, in today’s economy, it’s not the client’s demand for speed at low cost and high quality that is forcing our hand; it is our competitor’s. In every market, the companies that invest in generating speed are the ones that get ahead, so, while speed may have a cost, smart companies consider it an investment that generates good returns. Manufacturing firms, for example, seek to reduce the tradeoffs between quality and speed by investing in quality-improvement programs like Six Sigma while also using new lean manufacturing principles that eliminate waste and increase speed. While we have increased productivity and efficiency tremendously over the last century, there is always room to improve, and that pushes us to look for ways to do things faster.

Small Steps and Big Leaps

It is critical to understand, however, that there are two kinds of speed in the business world. First, there is the speed that you gain by making incremental improvements on existing processes. Lean processes focus on capturing this kind of speed, and, although it is incremental, it is still important. Incremental speed gains can account for major swings in market share in many industries, and, given that our current global economy is pushing our entire ecosystem to its limits, the combined impact of incremental efficiency gains is significant. We’re going to need every single incremental speed improvement that we can find if we want to sustain ourselves.

The second kind of speed is more of a leap than an incremental step. It’s the kind of speed that makes people stop, shake their heads, and say, “How did they do that?!” We came across a company called Back to the Roots that managed to develop a prototype for an entirely new product line of consumer-based hydroponics in only three days — simply because that’s the amount of time they were given. That flat-out doesn’t make sense. When Zappos went from $1 million in sales to $1 billion in sales in just eight years (two years ahead of its own schedule), we had a similar reaction. It just doesn’t seem possible to grow that fast when your primary business already has an air of impossibility around it (such as selling shoes via the internet). When the U.S. military jumped from running 18 intelligence operations a month in war-torn Iraq to more than 300 per month (which we talk about in Chapter 4 of our book), it is the same kind of leap.

As a capacity that drives organizational success in today’s world, incremental speed is important, but the kind of speed that enables you to leap ahead when the context demands it is in fact more critical. This, of course, is precisely the kind of speed that has defined social media’s growth. Media from previous eras, like television, could take their time growing. It took 13 years after the launch of television to reach a viewership of 50 million people. Facebook, on the other hand, has not yet hit its 13th birthday, but it has already amassed more than 1.2 billion active users. Even Google Plus managed to secure its first 25 million unique visitors in only two months (yes, months, not years) even though the market was already quite saturated with social networks at launch and its promise not well articulated. Today’s social world moves fast.

Why Millennials Care About Fast

The speed of today’s social internet is just fine for the Millennials. It’s all they have ever known. While the rest of us may be amazed that the smartphones we hold in our hands have more computing power than the computers our astronauts used to land on the moon (actually, even the early PCs in the 1980s were significantly more powerful than the ones we had earlier used for space travel), Millennials can get frustrated if it takes more than 12 months for the new version of the iPhone to be released. That’s not because they are an “entitled” generation; it’s because for many years Apple did release a new phone once a year (in addition to developing multiple editions of other products like computers, iPads, etc.). What seems fast to the rest of us is normal to Millennials.

And when they show up in the workplace, these differing standards become more obvious. The Millennials we consulted in our research seemed almost confused by their organizations’ inability to quickly shift and adapt to a new reality. This wasn’t unanimous — plenty of the Millennials we spoke to felt their organizations were doing a good job keeping up with the times — but there were many who could not understand why their organizations (and particularly the senior leaders) were still so committed to doing things the way they had always been done. As one Millennial said:

They are not keeping up with the speed. They are very stuck in their ways and promote the individuals who want to keep it slow. New, young workers come in with great ideas and fresh perspectives, but the older folks just keep it the “way that it is” and resist trying new things.

The result is a drag on innovation, which also seems to be connected to issues of organizational structure and hierarchy. The senior staff tend to be the ones who are clinging to the way things have always been done, but, even if they weren’t, the process of getting the requisite sign-offs from senior staff slows things down in ways that frustrate Millennials.

There seems to be a subtle attitude of “this is how we’ve always done things” that, at times, can stifle innovation or self-evaluation. This isn’t an issue that’s limited just to our office but rather seems to be a symptom of the entire organization’s structure. … Sometimes the flow of information up and down the leadership structure can quickly bog down leading to delays in making decisions. Typically this is just due to busy schedules and isn’t intentional, but when each decision needs multiple sign-offs and a meeting scheduled, it can take weeks.

Remember that one of the key societal trends that has shaped the Millennial generation was abundance, and the continuous release of new iPhones is just one example. Since they were children, they have been dealt a continuous stream of not just new tools but game-changing technology. Older generations get frustrated when they invest time and energy learning and setting up systems to support the use of a particular piece of technology or software, only to have it become obsolete within a short period of time, but Millennials simply drop it and move on to the next thing. Millennials let go easily, while the rest of us hold on, and that’s an important lesson for all of us.

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