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Why Big Business is usually last to the party
Please Ms CFO, can we have some new hardware?
Big businesses tend to be exceptionally risk averse. There's a general reluctance to adopt new, bleeding-edge technology because the priority – understandably – is to be able to maintain productivity.
Small companies can live with the occasional glitch in systems – a couple of dozen people without email for a couple of hours is far from the end of the world. The same isn't true if you have 10,000 people around the world relying on core systems, with thousands of pounds in lost revenue for every minute of downtime.
Actually, though, the avoidance of adopting a new system or technology “because it's risky” is dumb. What's sensible is the adoption of it because it's too risky.
I'm something of a believer in the teachings of the late Sir John Harvey Jones, former chairman of ICI and one of the better business gurus of modern telly: namely that if businesses don't change, they're very likely to wither and die. Which kind of turns risk aversion on its head: not only should you not be frightened of risk, you should actively embrace it because it's a natural bedfellow of change – and if you don't, you're going to see the competition streak past you in the race to the customer.
Yes, I understand the aversion of big businesses to changing something that's not broken. Fixing a dead system is one thing, but replacing something that works just fine with something a bit unknown can be daunting. But big businesses have a fairly fundamental advantage over the rest of us when it comes to improvements, upgrades and replacements: they're … well … big.
First of all, big businesses can afford proper development, test, staging and production environments for their systems. They can afford proper version management software, deployment systems that can roll new things in under strict control and which can roll back change in the event that something didn't quite work correctly.
Big businesses can also afford quality, qualified staff to manage all stages of an improvement – all the way from the production of the Request for Proposals, through the product/vendor evaluation cycle and the trial process, into the documentation and user training, and to the transition and operation of the system.
Big businesses also have more than an amorphous blob of people: they have locations, divisions, teams, departments, groups, … regardless of the structure there's always some way to divide them into manageable chunks and hence manage the introduction of change in a controlled, piece-by-piece manner. Frankly, I'd be more worried being a Facebook or a Google than being a 40,000-person services business – in the latter it's a whole lot easier to do a change that only affects a few users at a time.
Getting back to the subject of change, and the risk thereof, you're right to ask yourself the cost of something going wrong – both financially and reputationally. You also need to ask about the cost of not changing, though – or, more accurately, you need to stop dancing around change using weasel-words to hide what you're up to.
Anyone who's been a reasonably senior business manager has had to inch tentatively (at least metaphorically) into the CFO's office and beg for funding for a new system, or for permission to start a project. The justification is always one of two stories: (a) it's broken and we need to fix it; or (b) by spending X we're going to make Y, where Y is much greater than X (preferably several times more). But in both cases you're actually saying the same thing: if we don't make this change we're going to incur a cost.
If you're looking for funds to replace a broken system, that system must have a value to the company. If it didn't, you wouldn't need to replace it. By not executing the replacement (which may be a like-for-like replacement, though often it's a more modern alternative) you will incur a financial or reputational cost. And where you're looking to case (b), the cost of not proceeding is Y-X – and were that difference not significant you wouldn't be suggesting going to all that hassle.
The bigger the business, the better you can afford to mitigate the risk of change. You have more people and you probably have more funds, but hand-in-hand with both of those you also have economies of scale and most likely significant purchasing power. Unlike smaller businesses you have access to a much wider range of products and technologies, and as I've already said you also have access to the people and skills you need.
There's no excuse, then, for big business to be last to the party. And if you are, there's every chance that when you get there the place will be like the Mary Celeste, the vol-au-vents will be all gone, the only wine left will be the £2.99-from-the-corner-shop much some cheapskate brought along, and everyone will have tootled off to the clubs in town to carry on having a good time.
Turn off the light on your way out, would you?