Predicting the future with any accuracy is always fraught with difficulty: some see as no more than gambling and even the gaming industry has failed to accurately predict its own future.  Anticipating changing customer demands or technological development is almost impossible. But add to this the constraints of time pressurising businesses to continually perform quarter on quarter for the shareholder and the shocks of the future hit companies alpot more quicker than they used to.  In effect, a calendar quarter now represents one web year - because most companies are assessed per quarter, the five-year forecasts once valid have reduced to 15 months. 

In this environment, where accurate forecasting is pure luck, there is the need to identify any mechanism that will provide an edge.  Market leaders are achieving this edge by perfecting their ability to change over a short period, and consider that a critical core competency is their degree of adaptability. 

A true-life example of this difficulty of prediction is well illustrated by one of the brand giants of our time. One of the most successful names in the media industry thought it had conquered the music/entertainment industry, yet Sony only narrowly escaped Chapter 11/administration as the industry underwent a fundamental transformation in the way music is accessed and stored. 

The architect of Sony's decline was Apple - once leader of the PC industry yet almost consigned to the history books itself by the Wintel axis.  The iPod was developed by Apple after close monitoring of customer actions, demands and needs, and the resultant technology application has caused a revolution. The Walkman and music CD were revolutionary in their time, but the iPod has potentially sounded the death knell of these systems.

Service has changed in a similar way and, as importantly, is creating an incredible alteration to what was considered the norm only months ago.  Influential factors, which individually seemed to bode little, have created a significant difference over time.  A simple example is the rapid shift from a tangible fix provided by an engineer on site into the same requirement fixed by a remote call centre.  On-line, real-time access to the equipment, through the same internet or intranet network, can view the screen and resolve the problem remotely.

The pressure for these types of solution comes from the need to drive down the costs of service: an engineer fix could cost 10 times that of the on-line.  The same client will soon be able to dial up a web site and solve a problem through diagnostic questioning, at virtually no cost, except of course the investment to put the ability in place.  This is not science fiction but concrete. 

Many businesses look for help to beat the competition through differentiation.  They realise that preparedness and readiness to recognise future developments as early as possible, comes through a sensitive understanding of the customers changing demands; good luck happens when planning meets opportunity.

The concept of a highly adaptable company recognises that big or small is no longer necessarily good or bad.  One interpretation is that the adaptive company, applying Darwin's theory of evolution, is the most appropriate business model.  The businesses adapting the quickest and most effectively to a changing environment, modifying their behaviour irrespective of size or structure, will survive, and be the first to take advantage of opportunities when they see them.  Taking decisions with all the facts available is easy, taking calculated risks means making decisions on a limited information set, supported by ability and the knowledge that the operation can respond rapidly to modifications.  

References to large organisations as "dinosaurs" were most prevalent during the dot.com era, yet the majority of these dinosaurs seem to have survived, though in a different form, underlining that big or small is not the issue but it is the ability to adapt fast enough that determines success or failure.   Leading edge companies have recognised the necessity to adapt quickly and are using customer requirements as effective leverage within their business to get faster reactions: responding to the customer’s changing needs and adapting the total business to the changing marketplace, is one way to successfully thrive in an unstable environment; second is to adopt customer partnering and change the focus of the business from product-led into service-led.
 
It is very difficult for a product mentality to be transformed overnight into a service mentality; boardrooms established during the era of product supremacy now struggle with the concept of service-led processes.  It is even harder to get a business to recognise the value of customer input into the solution, when their history has been of telling the customer what they want.  At 18, a child will come of age, and not know all the answers but will know what they like and what they want, similarly many customers in our changing society are extremely well informed about what is available, but really need sympathetic guidance to make the right choices.

It should not be necessary for every business to brush with Chapter 11 before it recognises its problems. (Interestingly IBM, is held up by many as the best-in-class example of a services company, and, was the biggest product company in the world before narrowly avoiding Chapter 11 in 1995.  Then Lou Gerstner took the helm and created the largest services company in the world).

The service industry seems incapable of understanding the message at board level because making money out of service was considered as an annuity and not very visible, and therefore not as flamboyant as the one-off huge sale; the real pressure on service was always to keep the customer satisfied.  Sales may still be big, the margin is now smaller, and although service can deliver better margins, the impetus has still been for cost reduction to maintain margins.  This mentality has often resulted in limited investment in, and limited recognition of, the real value of service.

Businesses need to recognise that providing service requires a network of both primary suppliers as well as end-user customers, and that the best operations will partner with the best suppliers, will recruit and train the best people and focus on high value customers.

The first rule is to learn how to identify the best suppliers, staff and customers. The second is to understand their needs and the third to deliver to these needs.  In most cases, market leaders achieve their position by applying these rules. They acknowledge good performance from their suppliers by paying them more quickly than the ones that disappoint.  Using this as a yardstick, companies may be able to identify the speed of payment of specific suppliers and ensure their best suppliers get the best treatment. The attitude towards a customer might change if they paid you immediately on receipt of invoice instead of after 90 days.

Market leaders acknowledge and recognise their best customers in a number of ways, but certainly don't measure them by how loudly they shout.  What they will consider is the value of the customer to the business.  This value might be in the number of times they refer them or re-buy or renew; it might be from prompt payment, by the size of revenue generated or by the amount of margin provided.  The point is that they have established specific measurable criteria for evaluating their customers, and these are applied carefully.  All companies should have processes or measures in place that allow such best practice.

Last, but by no means least, it is worth considering how the market leaders treat their best people.  These businesses recognise that this is the hardest exercise of all.  Ensuring that the best staff are recognised and rewarded for their performance and that they like working for the company and are in the top quartile in terms of pay and conditions, is easy to say but can prove difficult.  The leading edge businesses demonstrate a visible respect for their best staff beyond just budgeting for training but affording status rewards as well as financial rewards.

Not all businesses recognise how important their suppliers and staff are in delivering service to their customers even if they pay the words lip service. The suppliers, customers and staff will know their own value, and the reason you don't is because you have not asked.  Therefore their assumption is you don't care.  The market leaders do care and as a result have the best suppliers, the best people and the best (loyal) customers.