How the last 10 years of business changed everything
This article has been published on World Economic Forum's Agenda | Author: Fakhri Ahmadov
Tactics are more important than strategy and less important than
vision. That appears to be the new set of rules in today’s business world.
Businesses cannot simply follow in the footsteps of their larger
rivals; they must forge their own path. In the past, transnational champions
would compete alongside one another at the top of the global market economy. In
today’s business world there is no second place, so following is not an option.
Last year, it became clear how much things had changed. For the
first time, the five most
valuable companies in the world were all tech companies –
Apple, Alphabet, Microsoft, Amazon and Facebook. So what is it that makes tech
giants so different?
Firstly, their
market values capture a significantly larger chunk of the
global economy. In 2007, only one tech business, Microsoft, was among the 10
biggest companies in the world. Ten years later, half of the top 10 are from
the tech world. It is not that other companies are shrinking, but that tech
firms are growing fast.
Businesses today need to move fast not just to gain advantage
over their rivals but in a bid for survival. Technology companies are much
quicker than those in other industries in gaining market share, controlling
costs, and making decisions due to their insistence on empowering staff to
create and innovate every day.
What’s more, innovations today are quickly adopted so they soon
become the norm. Time has sped up, opening up a wealth of opportunities for
creative people. There is no need to wait a century to build a top five
company, which was what it took a decade ago. You can do it in your lifetime.
On average, these companies are just 28 years old.All these companies are
established and managed by entrepreneurs, even if they are large public
companies. In most cases, a considerable portion of their voting shares are
held by their founders.
That is a dramatic change from 10 years ago, when the business
world was dominated by energy and mining companies with shared ownership and
decision-making; banks with bureaucratic governance rules; state-owned
behemoths; or family firms in consumer-focused industries.Thus, government and
public control of the world’s largest companies has been replaced with private
control by a few entrepreneurs, who would at least claim to be
socially-responsible and philanthropic. The whole structure of wealth,
governance and responsibility has been rebuilt.
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Author: Fakhri Ahmadov is Managing Director
at the firm, [email protected]