It goes without saying that the rate of change in business today is staggering, and it shows no signs of slowing. But as we grapple with that pace in our day-to-day business lives, it's usually difficult to see the forest for the trees. We tackle our tasks faster, take on more responsibility, all with near-term goals in mind.
Sometimes, though, we might be lucky enough to catch our collective breath and wonder just what we're doing — not just ourselves but our businesses.
Let's take a trip back in time to the 1970s. Back then, if you worked in electronics, odds are your company made something like mainframes or spacecraft or jet airplanes or communications systems. The people you worked with made everything that went into the end product.
But over the next four decades, the industry disaggregated slowly but surely. If you worked in the semiconductors division of that vertically integrated company, you might have ended up working for a semiconductor company after management sold off that unit.
The more things change…
This photo below from Tim Kastelle's recent blog post tells the story. Each of the technologies in the top part of the picture had enormous revenues… until each one didn't. Suddenly.
Flash forward to now and today's supply chain. If you're in distribution, your company is radically different than it was 15 years ago. If you're in contract manufacturing, you're not just making things any more. You're designing them. So are you a contract manufacturer or a design house ?
If you were a company that sold software into systems, odds are you are in the services business today, maybe hosting something for your customers via the cloud.
Kastelle's point — that your market is never stable — is spot on, but could you have predicted in 1993 that the Newton, of all products, would effectively end up sweeping up the functionality of all those other devices? Never in a million years.
The drivers turned out to be Moore's Law, software, and wireless connectivity.
What the future holds
For the supply chain, the battle during the next 20 years (maybe just 10, given the quickening pace of innovation) will be driven by data and the Internet of Things. Established companies that get that will grow; new companies that get that will disrupt today's smaller players.
The one constant will be the semiconductor components hot potato: They're crucial to innovation, but no one wants to hold them for longer than is absolutely necessary. Now, some financial innovation may emerge in the next decade that makes holding inventory less onerous — only time will tell.
The bottom line is things will change faster than we imagine, and it may behoove you to put the words, “What is your business?” up on a wall near your desk as a daily reminder.