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Published: January 1, 2000

 
 

The Godzilla of the New Economy

In an exclusive excerpt from his next book, the former head of McKinsey Asia explains why Amazon.com, CNN and others have achieved an almost unassailable global dominance.

Sudden sweeping changes throughout human history can often be traced to the discovery of new lands - the opening up of contact with a new geographic region with a different way of life. Such discoveries don't just create new ways of life for explorers and settlers; they transform the lives of people left behind in the old worlds as well. Today, there are no new lands left to discover, and yet, during the past 15 years, civilization has changed on a planetary scale more quickly than ever before. It's as if a new continent has been discovered after all - a continent without land.

Today, the entire world is an "old world." All of the continents we live upon, including Asia, Europe, North America, South America, Africa and Australia, are part of an established geopolitical environment. In the old world, national economies are rooted in the ownership of land, as well as in the use of machines and capital. On these continents, each nation's economy is distinct from every other's and economic activity is linked by the flows of tariffs and taxes. In the old world, macroeconomics and microeconomics are separate endeavors. Government leaders run their economies and are responsible for inflation, money supply and jobs.

The new, "invisible" continent offers us a different perspective. Here, the notion of Japan or America as economic aggressor is simply a cartographic illusion - a misperception that comes from the false idea that national borders reflect political autonomy. Corporations, regional governments, nations and nonprofits no longer occupy separate worlds. The economy of the new continent isn't tied to the nation-state, but is driven by consumers and investors who care little about national stability; they avoid taxes whenever possible and take the availability of jobs for granted because they know they can work for anyone, anywhere in the world. On the new continent, there is only "economics" - the interplay between a company's activities and the marketplace of global finance.

It may seem fanciful to call these environments old and new continents, but it turns out to be a useful metaphor with which to portray the mental model that successful businesspeople and politicians use to describe the two environments in which they operate. These two habitats occupy the same literal space, but exist in different dimensions. You cannot exist in both at once, but you can switch rapidly from one to the other - if you know how.

MAPPING THE NEW CONTINENT

Four characteristics of this new continent are particularly important for corporate decision-makers. First, because it is cyber-enabled, the new continent moves information, goods and services across borders both national and corporate with ease. Consumers control the chain of supply and demand, and global producers follow the lead of their customers. With the Internet acting as a continuously updated full-color catalogue of ideas, opportunities, trading potentials, critiques and attitudes, everyone has a highly sophisticated degree of commercial reach, a level of freedom that no nation can shackle. Second, as a landless continent, the new continent is easy to enter, but only for those who are willing to give up their old ways of thinking. The new continent should be approached as one might approach what might be a mirage in the desert: decisively, but warily. The technologies of the new continent are especially counterintuitive. Only three years ago, some were convinced that the Internet would soon crash. It did not. Two years ago, many argued that although it was good at retrieving information, it was too vulnerable for reliable transactions. In 1998, e-commerce was about $3 billion. It reached about $30 billion in 1999 and is expected to reach $100 billion by 2001.

Third, those who truly grasp the new infrastructure can carve out a territory that will be extremely difficult for invaders to capture. Thus, America Online Inc. has virtually cornered one significant part of the online market as the most attractive first point of contact for many customers.

Finally, the "frontier values" of the new continent are highly individualistic. Communities and families, or old-style establishment connections, do not determine worth in this world. Nor is there a single dominant elite. Rather, on this continent, there are thousands of elites who are only vaguely aware of each other's values. The most successful players are those who define their ethos on their own terms, which is why the online merchandiser Amazon.com Inc. maintains a high stock price despite the fact that it has never turned a profit. Investors intuitively recognize that Amazon.com has staked out a territory as the world's largest online retailer.

This new continent began to be settled in the early 1980's, and one might designate 1985 as the year it truly emerged. Almost every important figure in the new American economy began its enterprise around then. That was the year Microsoft Windows Version 1.0 was introduced in Seattle; Cable News Network began broadcasting in Atlanta, and the first Gateway 2000 computer was shipped from a cattle ranch in Sioux City, Iowa. Cisco Systems Inc., now the premier manufacturer of Internet network routers, was born in Palo Alto, Calif. In Austin, Tex., Dell Computer Corporation was just one year old; Sun Microsystems Inc., in Santa Clara, Calif., was three years old; George Soros' Quantum Fund, based in the Great Cayman Islands, was four years old, and the Oracle Corporation had been founded just eight years before. I call them "Godzillas" - companies that have become as voracious in their growth as the eponymous Japanese horror film lizard.

THE GODZILLA CORPORATION

The Godzilla companies that have thrived on the new continent have no precedents either for the speed of their ascent or the unconventional methods they used to pursue their goals. They represent a new corporate species, genetically programmed to grow and consume markets and resources at rates that would have seemed unthinkable before. They suck up the world's investment capital; they drain Wall Street and NASDAQ. Money that goes to them is not available elsewhere. Like Godzilla, they hatch fast, grow fast, and consume everything they can. Their size and speed make it impossible to deal with them strictly from an old-world mindset.

The first Godzilla-style company was the Microsoft Corporation, whose founders (Bill H. Gates III and Paul Allen) made their first contract as college dropouts. Its first consumer product, the operating system for the then-new I.B.M. personal computer, laid the foundation for Microsoft Windows - which came out in 1985. The world before Gates (B.G.) and after Gates (A.G.) is fundamentally different in that A.G., a layperson could easily be linked to the global network of computers. From 1985 on, Microsoft doubled in size every year - in revenues, stock price and number of employees - and currently enjoys the world's largest market capitalization.

But Microsoft was not the only company to grow at an extraordinary pace and from humble beginnings. Oracle also grew at exponential rates, ultimately becoming the software force behind the databanks of the Internet. Cisco has had nearly 300 percent annual growth in income from its business as a manufacturer of Internet routing hardware. It currently has sales of $11 billion and a market capitalization of $90 billion. Sun Microsystems, the voracious maker of high-powered Unix computers, was born at Stanford University. Dell was founded in a dorm room at the University of Texas at Austin.

These companies are notable for their growth in revenues and profits, but other Godzillas have achieved fame without profit. EBay, Amazon.com, Priceline.com and others have increased their share value simply by staking a territory on the new continent focused on a particular Internet service or market. One such company, Siebel Systems Inc., was created in 1995 as a spin-off of Oracle to produce sales force automation software. The company's market capitalization is now $2.5 billion. Many assume there is an investment bubble at play in the markets today, drawing money to companies that cannot possibly justify their stock prices. Though one cannot dismiss this possibility, there is reason to believe that investors so value these companies because they understand that an authentic land claim on the new continent might be worth billions. A true Godzilla company has high multiples because of its fundamental characteristics - which are not necessarily the same fundamentals valued by conventional old-world investors. The fundamentals of a Godzilla company represent a proven ability to take advantage of the new continent.

TRADITIONAL COMPANIES IN THE LAND OF GODZILLAS

If Godzillas have an innate advantage on the new continent, where does that leave conventional companies? I also think of them in terms of old monster movies: They are "Titans" - creatures with great power, but without the ability to contest Godzillas effectively. They are inevitably defeated or driven to smaller niches. Or they can learn to become more Godzilla-like themselves.

The Titans of our time are first-rate, successful companies like General Electric, I.B.M., 3M, Royal Philips Electronics and Sony. They have turned themselves around from periods of decline, often by extraordinary achievement and attention to performance. In recent years, Titan companies have prospered not so much by creating opportunities as by downsizing, restructuring and merging. The General Electric Company has streamlined its employment 15 percent per year under Jack F. Welch. Louis V. Gerstner Jr. has cut the International Business Machines Corporation's workforce from 500,000 to 250,000. Although the Titans represent the biggest and best corporations today, even they have not truly come to terms with the values of the new continent.

It is tempting to assume that the difference between Godzillas and Titans is directly related to the age of their C.E.O.'s - that younger entrepreneurs, emerging from the Silicon Jungle of the 1980's and 1990's, are more attuned to the needs of the new continent. But it is not that simple. Cisco Systems C.E.O. John T. Chambers is not that much younger than I.B.M.'s Mr. Gerstner or G.E.'s Mr. Welch. The crucial difference between them is the kind of organization they inherited. The C.E.O. of a Godzilla company can spend most of his or her time addressing the issues of business process redesign and organizational and personnel changes; every Godzilla business is constantly redesigned in light of the latest data on its supply chain and customer relationships. Godzilla leaders live and breathe the air of the new continent 24 hours a day. By contrast, the Gerstners and Welches of the world have other things to worry about: maintaining their facilities, cultivating sales reps, managing international distribution channels. They cannot walk away from their old-world investments in much the same way that Merrill Lynch & Company cannot dispense with its network of brokers and branches and become a purely electronic trader.

A third type of company - which I call a "bystander" - is also trying to establish itself on the new continent. Although they don't compete directly with the Godzillas, bystanders (much like the Titans) are weighed down by their pasts and their need to maintain relationships with unions and governments. They are like the human bystanders in the old monster movies, the ones who must run away to avoid being crushed. Actually, the bystanders may have a better chance to move into the Godzillean leagues than the Titans have, because on the new continent, there is no inherent advantage to size. The greatest advantage bystanders may have over Titans is that they have less to lose.

A STRATEGY FOR THE NEW CONTINENT

In order to compete at a Godzilla level, both titans and bystanders must leave behind conventional ways of thinking about corporate strategy, which are useless in a rapidly changeable, fast-moving frontier. On the new continent, you never know who your new competitor will be.

For example, consider the coming war over television access. Unlike television, the personal computer has not penetrated all households. People are simply allergic to keyboards and complex software, even with the user-friendly interfaces found on Windows or Macintosh computers.

If the television becomes a viable platform through which to connect to the Internet, PC and computer software manufacturers are in trouble. In fact, this may already be happening. Although Microsoft currently dominates computer operating systems and software, the Sony Playstation has recently emerged as an alternative. The Playstation does not resemble a typical computer operating system, but its hardware and software are as sophisticated as most personal computers. The first edition of the Playstation (which does not connect to the Internet) sold 50 million units worldwide - equivalent to one-quarter of the total number of personal computers and workstations. The Sony Playstation 2 will have Internet access built into its DVD player. It is only a matter of time before someone writes Playstation software that will convert it into a full-fledged personal computer platform - a computer that runs a non-Microsoft-Windows operating system.

And just as Microsoft was surprised by the Sony Corporation, Sony will in turn be surprised by new competitors from outside its industry - not Sega or Nintendo, but perhaps Docomo or Nokia, or even a service company like Starbucks or 7-Eleven. These companies do not regard themselves as bound by the norms of any particular industry. They go wherever their interests and capabilities take them. Of course consumers will ultimately determine the winners and losers, deciding whether they want Internet access through a telephone connection, fiber-optic cable, cellular phone, coaxial digital cable television, or a kiosk at the local convenience store.

Nobody's role on the new continent is fixed. Even in relatively slow-moving businesses, such as consumer packaged goods, the pace and uncertainty of competition will accelerate. A competitor will emerge from nowhere, quickly dominate the terrain and then, perhaps, disappear. The business environment will be much like the Japanese game of Go, where you might feel that you're winning as you march your stones across the table - until the pattern suddenly shifts and you see that you are in fact surrounded.

The customers on the new continent are also difficult to define in traditional terms, since the old boundaries between supplier and manufacturer, distributor and producer have broken down. Microsoft is the Intel Corporation's best customer. But Intel is also Microsoft's best customer. Who then is the supplier to whom? Moreover, the customer population will change continually. Five years from now, an electronics manufacturer's biggest customer might be Amazon.com, Priceline.com or AOL, which may give away a PC in exchange for a service contract. Or it might be individual customers, as it is for Gateway and Dell today.

Even the boundaries of the Godzilla company itself are uncertain. Godzillas outsource everything except their core competencies by organizing their entire business around a virtual single company "platform." They rely on strategic partners for logistics, delivery, billing, production, engineering and even managing their own computer systems. Orders come in through the Internet and products are assembled by dozens of partners throughout the world. The supply chain now encompasses the whole process of customer order-taking, from procurement and production to delivery. Companies like Federal Express and United Parcel Service are no longer transportation companies; they are an integral part of the Godzilla's corporate structure.

A company that outsources as much as Cisco, Nike or Dell cannot be defined by its roles and tasks; its boundaries aren't determined by the limits of its work force or the structure of its hierarchy. Cisco Systems sells its products through a Web-linked keiretsu that I call a "value group." Oracle uses many value-added retailers, such as Andersen Consulting, to develop its systems, turning Oracle itself into little more than a company that provides the raw material for a database. Nike Inc. contracts out its shoe manufacturing to producers throughout Asia whose workstations are interconnected. In a Web-shaped company, financially independent entities may be linked to the central decision-making process even more closely than subsidiaries are linked to each other in a conventional conglomerate.

BECOMING A GODZILLA COMPANY

Although Godzilla companies are each different, here are a few features critical to all of them.

Clarity of focus. Most Godzillas are either single-product or single-focus companies. Oracle makes database software. Cisco makes Internet routers. CNN is focused on global news. Dell and Gateway are primarily personal computer producers. Sun Microsystems is a server company. Intel makes microprocessors. AOL is an Internet provider. Yahoo is a search engine. Microsoft is a two-product company: It makes operating systems and the Microsoft Office suite of application programs. None of the Godzilla companies, not even Microsoft, is a full-fledged, full-standing "general production" company along the lines of the 20th-century model. Clarity of focus is important precisely because the business environment of the new continent is so diverse and unbounded. Pursuing a broad corporate plan is not just dangerous and expensive, it is unnecessary. Investors flock to narrowly focused companies because they are highly competent at providing a specialized product or service. Because the new continent is potentially so huge, being the perceived winner in one category will attract ample investment. On the new continent, only the self-constrained can grow - by carving out a territory it alone can dominate. Microsoft excels at this; it carved out the territory of the desktop computer with the MS-DOS operating system in 1980. Then it voraciously eliminated or internalized all competitors.

The primacy of the customer. Since 1995 there has been an amazing shift in the degree to which technology enables businesses to attend to customers. Thus, the core strategic element in the new continent is carving out a territory based on customer needs. This does not mean merely serving customer wants, but developing a customer interface that recognizes and rewards customers for the demands they make upon you, and that allows you to anticipate demands they are likely to make. The closer you can get to your customer, the better. The new call center and Web-based technologies are very effective customer interfaces. Not only do they survey customers about their buying patterns and service requirements, they also update the customers continuously, providing tailor-made products and services. Using these tools, a company like Cisco receives 69 percent of its inquiries and orders directly from customers. More than 70 percent of its after-sale service requests also come to the company online.

Zero-based organization. If a system fails, Godzillas recognize that it is better to start fresh and discard the old approaches entirely. Work rules, dress codes, telecommuting policies, managerial controls, accounting methods - all are up for grabs at Godzilla companies. Being unconstrained is a key factor for success on the new continent. And the same is true for legal and regulatory external commitments (although this does not mean you should break the law). Microsoft chairman and C.E.O. Bill Gates once told me that during the first 17 years of Microsoft's existence, he had never even been to Washington D.C. The 1998 anti-trust lawsuit took Microsoft by surprise precisely because Microsoft had assumed it was different from conventional companies. Managing the relationship with government is a paramount priority for ordinary companies, but Godzillas have neither respect nor much use for the goals and values of conventional corporations. By starting their companies on a zero-baseline, Godzillas avoid as many "legacy" elements of the corporate system as possible. This allows them to focus on leverage and arbitrage opportunities that others don't see.

Location irrelevance. Godzillas seldom hail from large Industrial-Age metropolises like New York, Tokyo, London or Los Angeles. Instead, they come from Seattle, Wash. (Microsoft), Austin, Tex. (Dell), the Caribbean (Soros), San Jose, Calif. (Cisco), or Atlanta, Ga. (CNN). This is partly due to the use of networks - from toll-free numbers to the Internet - but I think it ultimately comes from the fact that revolutions tend to bloom in places where individuals inherit few social constraints and are less inhibited in their thinking. Today, large cities are governed by conservative establishments. India (Bangalore, Hyderaband and Pune), Ireland, Finland, Singapore and Malaysia (the Multimedia Super Corridor) may have a good chance to succeed in the new continent precisely because they are considered "backwaters" by the leaders of the old world.

Value chain shortcuts. The key business strategy on the new continent is to bypass the value chain and shorten the links to your customer. The most crucial interface is between you and the customer. Conversely, the customer should be able to order directly from the provider without having to go through an intermediary.

Consider Cisco Systems' automated purchase process. Since 70 percent of its customers place orders via the Web, there is no need for a traditional sales force. Cisco has more than 120 partners in its Internet router production process who act together - procuring, producing, shipping, repairing - as a single, virtual company. Customers place orders directly into an "Electronic Retrieval Process" system that selects suppliers and assemblers. Even the engineering function is integrated into the system; when a customer designs a router, the product is fitted to his or her needs by Cisco's design department using its database of customer-developed specifications. The companies that use this platform join Cisco's partnership and become, in effect, part of the corporate nervous system. From the customers' perspective, the platform is seamless; whether a router is made at a Cisco plant or by a partner company makes no difference to them. All finished products are tested by Cisco's computers in order to protect its brand name. The system saves Cisco $450 million per year.

Pointcast, not broadcast. As the old "broadcast" model of marketing becomes outmoded, "narrowcasting" and "pointcasting" have grown more important. In narrowcasting, the customer database is used to find people who are statistically likely to be interested in a particular product or service. Supermarket coupons are increasingly narrowcast, printed in different arrangements to suit people by neighborhood. Most magazine advertising is narrowcast - an ad in Ladies' Home Journal will not run in Fly Fisherman magazine. Direct mail is sent out to a segment of customers who are relevant to the product in question. But narrowcasting, at best, has a 2 to 3 percent hit rate.

In contrast, pointcast marketing can have a better than 50 percent hit rate. It represents a vast democratization of the traditional privilege of aristocracy - to be served and catered to on an individual basis. Using this model, marketers seek only customers who have already indicated they want a particular kind of product.

Dell and Gateway are well-known for their pointcast products, which are built according to a consumer's specifications. Soon it will be common for purchasers to design cars on computer screens, choosing not only predetermined options, but options provided by a variety of manufacturers: a Honda engine in a Toyota body with Ford seats and interiors. You might even be able to watch a car being assembled on a computer screen while your insurance and car payment terms are tailored to your finances. By 2001, consumers in the United States will spend $100 billion on e-commerce, which means that one-third ofconsumer purchases could, in theory, follow the business-to-business model of Cisco, allowing customers to co-design everything they buy.

Pointcasting creates sophisticated relationships with consumers by developing an ever-growing knowledge base. One key to Amazon.com's success is that it really knows its customers; every time you sign on, it automatically gives you a list of suggested books, CD's and videos based on your past purchases. Amazon.com's banner advertisements are also tailored to individual customers, using information mined from the customer database. Another pointcast service, Bluemountain.com, creates and sends greeting cards, maintaining a database of addresses and important dates (e.g., wedding anniversaries), as well as preferences in card style and message, for each of its customers.

The C.E.O. as C.I.O. With the rise of electronic commerce on the new continent, there is nothing more important than technology. Nobody needs to explain the strategic implications of cyberspace to Michael S. Dell or Cisco's John Chambers. They both played hands-on roles in designing their companies' organization, management and information systems. If a company must be reorganized, as most large established companies must, the process should be led by a technologically savvy C.E.O., not a reengineering consultant.

In a transitional era like ours, the worst thing an aspiring Godzilla can do is base its decisions on past or existing practices. You have to be able to design a company with nothing but the future relationships between the customers and your company in mind. The rest - vendors, subcontractors, wholesalers and retail chains - will fall into place if you have designed the corporate structure and management systems correctly.

This point came home to me during a conversation I had in the late 1980's with Walter B. Wriston, then the chairman of Citicorp (now a part of Citigroup Inc.). He mentioned that he had picked his successor, John S. Reed. I was surprised since I knew Mr. Reed's background was in technology, not banking. "Why have you chosen him," I asked, "when there are so many other potential heirs apparent?"

"The future of banking," Mr. Wriston replied, "is going to be determined by nanoseconds. It's a technology game, and it's very, very hard to teach bankers the technology. It's easier for a smart technology guy to learn banking, so I actually need this M.I.T. graduate."

Later, I had occasion to ask Mr. Reed whether Mr. Wriston had indeed picked him for this reason. Mr. Reed confirmed it and said, "I refused at first. I said I would not be a good C.E.O. of Citicorp because I don't know anybody in Washington. I don't know anybody in the industry. All I know is technology." But Mr. Wriston told him not to worry: "If you are the chairman of Citicorp, all the important guys will come to you, and you'll get to know them in two or three years. Time will solve that problem."

Web-shaped organizations. Rather than using pyramid-like hierarchies in which each person has a precisely delineated task, Godzillas organize around flexible platforms. The platforms are distinct, and the people do whatever is necessary to develop and use them effectively around the world and around the clock.

Consider the "telephone service representatives" at the Gateway call center in Dublin. A call is first routed according to language: Swedish speakers get one rep, for instance, while speakers of Italian get another. Both of these reps have been trained to fulfill a variety of functions. First, they are operators who route calls to specialists as needed. Second, they are salespeople who suggest various options and then close the sale. Third, they are design engineers who can coordinate the optimal software/hardware combination to meet a customer's needs. Fourth, the rep drives the internal production process by designing the diagram that goes to the central computer in South Dakota, which then directs U.P.S. to buy the components and ship them to the appropriate assembly facility. U.P.S., working on Gateway's platform, brings these components (software, display, CPU, keyboard) from vendors to the depot nearest the customer. Finally, the rep handles customer service and cross-selling; if a customer has a problem, his or her call is routed back to the rep with whom the customer already has a relationship. Most of the jobs at Godzilla companies are similarly organized, revolving around customer relationships rather than specialized tasks or functions.

Global Reach. Godzilla companies conceive of their headquarters as existing in a virtual space that is equidistant from all of their customers. When they expand, they expand to all markets simultaneously according to what I call the "sprinkler" model. CNN, which entered 230 countries and territories almost simultaneously, is perhaps the trailblazer in this strategy.

The Internet has made it much easier to become simultaneously global and newly born. Before Amazon.com, book publishers were national by nature; a title published by a company in the United States would be published by another in Britain. But Amazon.com instantly did away with these conventions by making it easier, quicker and more convenient for the British to order American books online than it was to get them from their British publishers and bookstores. The power of borderless book-buying became clear in 1999 when Scholastic Inc. in New York was forced to move up the publication date of its enormously popular "Harry Potter" children's series because tens of thousands of people were ordering it from Amazon.com's British Web site rather than waiting for the American edition. Other Godzillas, including Microsoft, Cisco, Gateway and Dell, were also born global. The key enabling platforms have been the availability of logistics (such as U.P.S. and Federal Express services) and credit cards, which make international purchasing as easy as purchasing at home.

Growth through acquisition. Godzilla companies have a number of advantages over Titans when it comes to acquisitions. First, because of their extremely high multiples, they have the resources to acquire the highest quality companies. Cisco has been able to acquire companies with excellent Internet network technology, and Global Crossing is expanding beyond its original business (running fiber-optic cables across oceans) by taking over several extremely efficient regional telephone companies. In five or 10 years' time, these Godzillas may grow to resemble the huge multinationals of today - except for the fact that they make better use of systems and platforms. Perhaps the most difficult aspect of a merger is integrating the new acquisition with the corporate parent. Typically, Godzilla companies select their acquisitions so carefully that they don't have these difficulties. Although Cisco has purchased many companies, it is said that on the day after the acquisition the employees in the new part of the company feel as if they have been working for Cisco for decades.

I once asked Cisco C.E.O. John Chambers what the most important element was in his decision to acquire a company. "It's not what the company does, or [its] technology per se," he told me, "it's the chemistry between our people and [its] people." When the C.E.O.'s on both sides have chemistry and there is a common vision of the company's long-term future, the integration can be very smooth. A company's rapid, Godzilla-style growth rate also makes a difference; if people on both sides have stock options in the newly merged entity, then the new corporation's potential for extraordinary growth gives all of them an additional incentive to make the merger work. Because Godzillas are organized in networks, they are able to grow with fewer distortions and internal rivalries than hierarchical companies, in which positions are limited as you are promoted. In a Web-shaped company, you simply add leadership positions as you grow.

React to customers, not financial markets. Vast quantities of money move swiftly and unpredictably throughout the economy of the new continent, which makes financial markets unreliable measures of wealth. In order to survive these oscillations, corporate leaders must think in five-to-10-year time frames, so that they can remain immune from the damaging effects of these short-term shifts. Godzilla companies have an innate feel for this. They constantly design and redesign their organizational channels while maintaining a clear sense of their overall direction. Can an established company actually follow these prescriptions and become a Godzilla on the new continent? Taking that path entails enduring an enormous amount of uncertainty and perhaps even sacrificing some of the strength the company possessed in the old world. It means, in effect, reshaping a dog to create a cat.

The problem facing old-world companies is that they must adjust their time frames. In the old continent, events take place more slowly, and actions require approval from people with vested interests in maintaining the system. On the new continent, events take place quickly and constant adaptation is needed. Making a transition like this one requires a company to think counterintuitively. Bill Gates has often said that he believes Microsoft could fall if he makes even one mistake, and he is right. Every night is a sleepless night on the new continent.

Reprint No. 00112


Authors
Kenichi Ohmae, kohmae@work.ohmae.co.jp
Kenichi Ohmae is managing director of Tokyo-based Ohmae & Associates. Mr. Ohmae, a corporate strategist and advisor to governments around the world, is a former director of McKinsey & Co. and chairman of its Asia-Pacific operations. He is the author of dozens of books and writes frequently for major business publications worldwide.
 
 
 
 
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