New Rule of Money #5: The Need for Speed
Why size doesn’t matter and agility does in the Information Age
Dr. Buckminster Fuller once said that when change went invisible, the speed of that change would increase exponentially—what he called accelerating acceleration.
In his lectures, Dr. Fuller talked about the pace of technology and how we were “entering the world of the invisible.” To him technology was advancing so rapidly that many people were blind to it…and would be blindsided by it. He was worried that millions of people would not see the changes technology were bringing to the world quickly enough and that they would, as a result, be put out of work by technology and inventions that operate well out side their vision. He said, “You cannot get out of the way of things you cannot see moving toward you.”
Today, you must be able to keep up with the pace of change in technology. This starts with understanding that we live in an age where information is a powerful currency and knowledge is money. This is the foundation for having the speed to keep up with change.
Welcome to the Information Age
As I’ve written before, we’re in the Information Age. In the Information Age, it’s the fast that eat the slow. In order to survive, you must be able to think and adapt at the speed of information.
In the Information Age, anyone can get wealthy because everyone has access to the same information via the Internet. It’s simply a matter of who can think the most creatively and act most quickly upon the information available to them.
In the Information Age, Industrial Age companies—and those who operate like them—are toast, and nimble entrepreneurs, and those who can think like them, are winners.
To illustrate, let’s take a look at Kodak, the company who pioneered personal photography.
The fall of Kodak
In 2012, Kodak filed for bankruptcy. For years they had ruled the photography world, but now they were failing. Why? In the face of the rise of digital photography, Kodak failed to respond to it as a threat. They thought they were too big to fail.
Unfortunately they were not. In fact, the worse part is that Kodak had invented digital photography years earlier and could have easily been first to market. Instead, they sat on the technology because they were afraid of cannibalizing their core business of physical photography.
Today, they are a shell of who they were and the only ones cannibalizing their core business are other companies who saw the potential of digital photography.
The definition of insanity
In 2012, The Wall Street Journal reported that Kodak was “seeking permission to pay about 300 executives and other employees a total of $13.5 million in bonuses to persuade them to stay with the company as it reorganizes under bankruptcy-law protection.”
Why did Kodak want to reward executives that oversaw the company’s voyage to bankruptcy? As the New York Post reported , “The targeted employees have knowledge and skills critical to help the business emerge from Chapter 11 and would be difficult to replace if they left to pursue other offers.”
As the old saying goes, the definition of insanity is doing the same thing and expecting different results. Only in old-world, Industrial-Age thinking, would a company seek to reward the employees that ran it into the ground in an attempt to retain them to fix the problems they created.
Such thinking betrayed a lack of understanding that the world had changed and that Kodak had to change with it if it wanted to be successful. In a world that called for the need for speed, Kodak chose to stick with older, slower, more comfortable ways.
Understanding the what but not the why
The reason that Kodak, once the leader in the photography business, had to file for bankruptcy was not because they lost talent but rather because the talent they wanted to retain had failed them.
Kodak lost its edge and failed to innovate. As a result, they first lost market share to Japanese competition and then became unable to keep pace with the shift from film to digital technology.
While Kodak understood the need for digital technologies (the what), they failed to understand how people would use them (the why). Instead, they opted to rely on digital technologies that pushed people to printing photos—an Industrial Age way of thinking.
Kodak was so focused on what they made, photos, that they failed to remember why they made them, to be shared. Rather than focus on technologies that made sharing easier, they chose to focus on technologies that made creating photos easier while keeping up the roadblocks to sharing.
Building for the why
Now compare this with another photography company that is much different than Kodak—Instagram.
Instagram’s philosophy is very simple. Enable people to take pictures on their phones, doctor them up a bit, and share them online. It’s free, has been updated countless times in the last few years to accommodate users’ demands, and has millions of users.
Instagram was focused on meeting people’s why, not just their what. As a result, they were hugely successful.
A few years ago, Facebook bought Instagram for $1 billion. It had thirteen employees.
When it went under bankruptcy, Kodak had 7,600 employees and about 16,000 Medicare-eligible retirees.
All this serves to illustrate that size really doesn’t matter—speed does.
Think like an entrepreneur
This isn’t to say that small companies are better than big ones. Rather, big companies must still think like small ones, especially in this day and age of ever-changing information.
Innovation is key. Only those who have the agility to change with the market and innovate quickly will survive. And most often, it is entrepreneurs who lead in this category. The best companies are the ones that continue to think like entrepreneurs, and the richest people are entrepreneurs.
Thinking like an entrepreneur takes a strong financial education. The Rich Dad Company was created to help train and raise up entrepreneurs.
I hope you start investing in your financial education today and start acting like an entrepreneur. If you do, the world is your oyster.