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Thursday, July 31, 2014

PERSONAL SPECIAL ............................An excerpt from from Seven Choices for Success and Significance

An excerpt from
from Seven Choices for Success and Significance
by Nido R. Qubein
What is success? Only you can define it in your own life. In my own life, I have attempted to define both Success and Significance.

To me, Success is secular. Significance is spiritual.

It doesn’t matter how you define your own spirituality. Spiritual matters are always finer, deeper, and longer lasting than secular matters.

Success focuses on three Fs:

• Fans
• Fame
• Fortune

Success is focused on tasks, even goals.

Significance also focuses on three Fs:

• Faith
• Family
• Friends

But, significance focuses on purpose. Why am I here? What do I do with the talents, experiences and skills that I have? How can I make the world a better place? How do I plant seeds of greatness in the lives of those around me? How do I make an impact in the circles of influence where I find or place myself?

To choose success and significance, you must be a strategic thinker who:

• Has a clear vision of what you want to accomplish
• Develops a solid strategy that answers three questions:
- Who or what are we today?
- Who do we want to become?
- How do we get there?
• Employs practical systems to achieve your goals
• Commits to consistent execution because in consistency, success emerges.

When implementing your strategic plan for success, it really comes down to three “Ds”:

Decide what you want most to achieve
Determine the first step to getting what you want
Do the first thing that will start you moving toward your goal.

Using these seven keys, you can choose success and significance. But keep this in mind: success is not a matter of luck, not an accident of birth, not a reward for virtue. The most successful people I know are the ones who have something to do, somewhere to be and someone to love.

No one is responsible for your success or your joy. You must search for it and be in a continual state of earning it.

To merely succeed is not an end in itself. You must use your success to impact other people…to impact the world…to Live Life from the Inside Out.

It all starts with the choices you make—they determine the person you will become.

INNOVATION SPECIAL .............................What The Wright Brothers Could Teach Today's Innovators About Solving Problems

INNOVATION SPECIAL What The Wright Brothers Could Teach Today's Innovators About Solving Problems


One key to successful innovation, a growing body of innovation thinkers believe, is trial-and-error experimentation. Proponents of the Lean Startup methodology urge innovators to create a minimum viable product (MVP)--something that solves a customer’s problem adequately but isn’t perfectly polished--and use it as a vehicle to gather critical in-market learning. The approach makes many executives inside big companies nervous. After all, experiments can fail, which implies taking on a risk that could blow back in some way to harm the core business. And in some industries even developing a good enough product is time consuming and expensive.
Consider how, for example, innovators approached the development of manned flight. Since most animals that can fly have wings, one group naturally thought about developing strap-on wings. To test a particular design, they’d go to the top of a tall structure, and jump. Wrong assumptions had predictable consequences. Other innovators tried to create flying machines, taking years to build expensive prototypes that often didn’t survive the testing process.

The way the Wright Brothers approached the problem offers important lessons for modern innovators. The Wright Brothers were consummate experimenters. But they found relatively simple, low-risk ways to test their assumptions. Rather than going to the top of a tall building and jumping or spending years tinkering to create the perfect prototype, they built and flew kites. Not only could they build kites more rapidly, but they hadn’t risked life and limb or depleted their bank accounts when it turned out that they got something wrong.
Still, they hungered for other ways to speed the learning process. In 1901, using a wooden box, a hacksaw blade, bicycle-spoke wire, and a fan, they built a six-foot long “wind tunnel.” After a month of tinkering, they figured out how to use it to test assumptions about design. The tunnel allowed them to see how different shaped wings would perform in different wind conditions without having to build an entire craft, and, of course, rebuild that craft if something bad happened.

By simplifying the testing process, the Wright Brothers could test more than 200 types of wings in two exhilarating months. They experimented with models proposed by other would-be aviators, carefully measuring the aerodynamic lift of different designs in different conditions. Wilbur Wright later recalled that they learned that most of the mathematical assumptions inventors used about how different aspect ratios--the ratio between the wing’s length and its span--would affect lift were “full of errors.”
Analyzing the data that came from their rapid experiments accelerated the Wright Brothers’ path to developing a viable flying machine. Wilbur wrote, “it is doubtful if anyone would have ever developed a flyable wing without first developing this data.”
The wind tunnel allowed the Wright Brothers to learn a tremendous amount without creating full prototypes or doing the equivalent of in-market learning. And you can learn before you build a MVP by considering three straightforward approaches.
Do desk research. A few years ago, Innosight advised a team inside a big consumer products company that was thinking about a new offering to target college campuses. The company hoped to deliver a device to centralized points on campuses, drive usage through targeted awareness campaigns, and then make money on the consumable components that went into the device. The business plan assumed that it would take about three months to work through the process of getting approval to sell to a school. However, no one on the team had ever sold to a school before.
They could of course go and pilot the idea at a few schools and see how long it took. Or they could simply pick up the phone and call someone who made a living selling to schools. One of the team members had a family friend who worked at a company that sold security solutions to schools. He was more than happy to talk about his experiences. It turned out in many cases the sales cycle wasn’t three months--it was three years. Schools move slowly, with decision-making authority intentionally diffuse. That didn’t mean the idea was bad, it just meant the team needed to approach it differently and assume it would grow more slowly than it first projected. There is a misbegotten belief that action is the only way to learn. The combination of LinkedIn and Google mean that experts who can shed light on critical assumptions are no more than a mouse click away.

Run a thought experiment. Fast food giantMcDonald’s regularly evaluates new concepts for its menu. A few years ago it considered a shrimp salad. The idea fit general trends toward health consciousness. It could be pre-packed, fitting neatly into McDonald’s delivery model. However, any idea McDonald’s introduces has to have the potential to scale to its tens of thousands of stores around the globe. McDonald’s ran a thought experiment. How much shrimp would be required if it scaled the idea around the world? How did that compare to the current supply of shrimp? It turned out that McDonald’s would put a significant dent in the U.S. shrimp supply, which would drive up prices and make the idea unprofitable. You can run your own “shrimp stress test” in your imagination. What would it look like if you succeeded? Is there a hidden rate-limiting assumption that would make success impossible? Thought experiments are wonderful ways to learn because they don’t cost anything, and force you to take an external perspective on key strategic issues. They can be conducted by an individual, but work best when they involve people who bring diverse, external perspectives.

Perform a focused feasibility test. About 15 years ago, Reed Hastings had an idea. What if, instead of going to a store to return a movie, a consumer could simply return it through the mail? Customers would still pay late fees--after all, that enticement to return videos helped ensure adequate inventory of movies--but the ease of dropping a DVD in the mail would increase convenience and customer satisfaction. Ultimately Hastings and his team built an incredibly sophisticated system to manage the intricacies of delivering millions of DVDs around the United States and shifted the model to a highly disruptive all-you-can-eat subscription offering. Before making any investment, however, Hastings had a basic question: could you actually mail a DVD and not have it get mangled? It was simple enough to learn more about this uncertainty. Hastings mailed a CD to himself in an envelope. A couple of days later he had his answer: the postal service could in fact complete a mailing without damage. Total investment: less than $5.
The activities described above aren’t quite as exciting as developing a full blown offering and attracting real customers. But, like the wind tunnel, they allow innovators to learn quickly with lower investment and lower risk. As Wilbur Wright noted, “Sometimes the non-glamorous lab work is absolutely crucial to the success of a project.”
So, what’s your wind tunnel?
WRITTEN BY Scott Anthony

GADGET GIZMO SPECIAL............................................. Review: HTC Desire 616


HTC now has a number of dual SIM smartphones to compete with Indian brands. The Desire 616 is the latest midrange offering from HTC with an octa core processor. 
While most budget smartphones from Indian brands have a 1.7Ghz Mediatek octa core, Desire 616 has a 1.4Ghz octa core. Not that this affects day-to-day performance — most apps and games run without a hitch and even multi-tasking is smooth as long as you don't have too many apps.

However, the 1GB RAM feels less — evident while playing games like ShadowGun and Asphalt 8. In addition, HTC has cut corners in storage. You get 4GB of internal storage out of which only 1.62GB is available for apps.

Thankfully there is a microSD slot present for expansion, but at this price just 4GB storage from a global brand like HTC is disappointing. It feels sturdy to hold and borrows design elements from the Desire 816. However, the plastic rear panel attracts a lot of scratches and fingerprints that make it look old within a few minutes of usage.

The 5-inch HD display has good touch response and bright colours. We noticed that the signal reception on the review unit we had was weak — where other phones showed 3 bars, it showed just 1 bar or at times none.Multimedia performance was a mixed bag.

The rear camera took average images in daylight, but in low light and even indoors it proved to be useless — images were too noisy, there was lack of details and flat colours. The saving grace was video recording in full HD resolution which was good quality.

Audio output from the speakers was good — not very loud. but good enough for the intended usage. The 2,000mAh battery lasted one day as expected.
Unfortunately, the Desire 616 does not offer anything that makes it stand out. Check the Panasonic P81 for the same price that offers a larger display, similar hardware with better performance and dual SIM capabilities.

Otherwise, also consider the new Xiaomi Mi 3, which is far better in every way and it costs just Rs 13,999.


5-inch IPS (1280 x 720) 1.4Ghz octa core 1GB RAM, 4GB + microSD 8MP rear + 2MP front cam 3G, WiFi, BT 4.0, dual SIM, Android 4.2 2,000mAh battery, 150g


Good display, full HD video recording, octa core processor


Average camera, sub-par battery life, low internal storage, signal reception issues

By Hitesh Raj Bhagat, ET 140728

SUSTAINABILITY / BUSINESS SPECIAL ......................Sustainability’s strategic worth: McKinsey Global Survey results

SUSTAINABILITY BUSINESS SPECIAL Sustainability’s strategic worth: McKinsey Global Survey results
Executives at all levels see an important business role for sustainability. But when it comes to mastering the reputation, execution, and accountability of their sustainability programs, many companies have far to go.
Company leaders are rallying behind sustainability, and executives overall believe the issue is increasingly important to their companies’ strategy. But as it continues to grow into a core business issue, challenges to capturing its full value lie ahead. These are among the key findings from our most recent McKinsey survey on the topic,1 which asked respondents about the actions their companies are taking to address environmental, social, or governance issues, the practices they use to manage sustainability, and the value at stake.
One such challenge is reputation management. Year over year, large shares of executives cite reputation as a top reason their companies address sustainability; of the 13 core activities we asked about, they say reputation has the most value potential for their industries. However, many of this year’s respondents say their companies are not pursuing the reputation-building activities that would maximize that financial value.
Comparing companies with the most effective sustainability programs (our sustainability “leaders”) with others in their industries highlights another obstacle: incorporating sustainability into key organizational processes, such as performance management, one area where the leaders report better results than others. Beyond strong performance on processes, the leaders share other characteristics that are keys to a successful sustainability program—among them, aggressive goals (both internal and external), a focused strategy, and broad leadership buy-in.
Sustainability rising
According to executives, sustainability is becoming a more strategic and integral part of their businesses. In past surveys, when asked about their companies’ reasons for pursuing sustainability, respondents most often cited cost cutting or reputation management. Now 43 percent (and the largest share) say their companies seek to align sustainability with their overall business goals, mission, or values2 —up from 30 percent who said so in 2012.

One reason for the shift may be that company leaders themselves believe the issue is more important. CEOs are twice as likely as they were in 2012 to say sustainability is their top priority. Larger shares of all other executives also count sustainability as a top three item on their CEOs’ agendas.
As sustainability rises in significance, capturing its full value grows more challenging—perhaps because the more that companies prioritize sustainability, the more it needs to be integrated into (and even change) the core business. At companies that are already taking action, respondents most often cite challenges related to execution: the absence of performance incentives and the presence of short-term earnings pressure that’s at odds with the longer-term nature of these issues. Accountability is an increasing concern: 34 percent of executives (compared with 23 percent in 2011) say too few people at their companies are accountable for sustainability. At companies that aren’t pursuing sustainability activities, respondents continue to cite a lack of leadership prioritization as the top challenge to taking action.
Reckoning with reputation
Of 13 core sustainability activities we asked about, executives most often say their companies are reducing energy use in operations (64 percent), reducing waste (63 percent), and managing their corporate reputations for sustainability (59 percent). These actions were cited most often in 2011 and 2012, and a growing share of executives now identifies reputation management as a core activity. They are also most likely to say that among these activities, reputation management has the highest value-creation potential for their industries over the next five years.
Yet there’s a lack of clarity around reputation management, compared with other, better-defined activities, such as reaching new markets with sustainable products. We asked executives what actions the companies they work for take to manage their reputations, and, on average, companies most frequently communicate their activities to consumers and maintain stakeholder relationships. Yet the results vary by industry, indicating that companies understand and value reputation in very different ways .
Many of the differences depend on how much action companies are taking on reputation, and on the overall sustainability agenda. In extractive services, executives say their companies are pursuing seven core sustainability activities, with three-quarters saying reputation management is one of them (compared with 59 percent of all respondents). The reputation-building actions these companies focus on—local community investments, external reporting, and employee volunteering—differ, then, from those of their peers in high tech, where companies take an average of five actions and just half of respondents say reputation management is one of them. These results confirm that there’s no one-size-fits-all approach to reputation, possibly one reason why reputation, like sustainability more broadly, is hard for many companies to manage.
When asked which activities maximize financial value, respondents most often cite customer communications. Beyond that, there are disparities between current reputation-management activities and the ones that are most critical to value creation (Exhibit 4). These results also vary by industry and reflect the importance of understanding and communicating sustainability’s financial value, from the leadership down. In extractive services, where the board and C-suite are most engaged and respondents are the most likely to expect that sustainability will create value, respondents identify the same activity (community investment) as a current action and a source of value. In contrast, those in financial services—where respondents report the lowest level of leader engagement and perceived value—most often cite employee volunteering, the activity they rank lowest with respect to value creation.

What leadership looks like

Regardless of a company’s industry, its value-creation efforts require certain organizational traits. From our experience and previous work,3 we identified a few as the building blocks of a successful sustainability program. Indeed, when we identified our sustainability leaders—companies where executives report the strongest performance on core sustainability activities, relative to industry peers—we found that they share these characteristics.
It’s not surprising that leaders are much likelier than other companies to possess all 12 of these characteristics, though the results suggest which traits differentiate leaders from the rest (Exhibit 5). Executives at these companies are almost five times more likely than others to say they use aggressive external goals for sustainability, more than three times likelier to report a focused strategy, and nearly three times likelier to report an organization-wide understanding of sustainability’s financial benefits. In addition, leaders more often have in place the key components of performance management, such as aggressive internal goals and broad leadership coalitions to develop their programs.4

What’s more, much larger shares of executives at the leader organizations say their top leaders prioritize sustainability and report higher employee engagement on sustainability at every level, including CEOs, board members, and sustainability advisory committees. They report that their companies are taking more action to manage the life cycles of their products, and are four times more likely than others to say they have already implemented a life-cycle strategy. And they say their companies face fewer barriers to realizing value from sustainability, because they report better overall performance on the practices that underpin a healthy sustainability organization.
Organizing for sustainability
To better understand the defining traits of well-performing sustainability programs, we examined the organizational practices that underlie these characteristics. Of these, executives say their companies are better at fostering an organizational culture around sustainability and setting the direction for their programs. They struggle most with components of program execution, including employee motivation, capability building, and coordination of their sustainability work, which is reflected in the responses on specific practices (Exhibit 6). These results make sense, given the current levels of alignment between sustainability and various elements of the organization. Fifty-eight percent of executives say sustainability is fully or mostly integrated into their companies’ culture, compared with 38 percent who say so for performance management.
Looking more closely at individual practices, some interesting patterns emerge. We identified four distinct approaches to the sustainability organization: leader supported, execution focused, externally oriented, and deeply integrated (see sidebar, “Four approaches to the sustainability organization”). The first approach is characterized by actively engaged leaders across the company, employee encouragement, and clear strategy; the second by clear structure, accountability, and middle-manager engagement; the third by the use of external ideas, networks, and relationships, as well as top-leader and middle-manager engagement; and the fourth by employee incentives for sustainability work, a focus on talent, and even engagement on sustainability at all levels of tenure. Our sustainability leaders are represented in each of these four approaches, confirming that there’s no single formula for sustainability success.
Looking ahead
·         Extend the product life cycle. Today, resource constraints are creating unprecedented prices and volatility in natural-resource markets. Yet the results indicate that most companies have not even begun to implement strategies that extend the life of their products and thereby reduce their resource dependence in a significant way. According to our other research,5there is huge value potential in better design and in the optimization of products for multiple cycles of disassembly and reuse. Forward-looking companies should begin investing in the “circularity” of their products, for the benefit of society and for their bottom line. On materials alone, companies could potentially save more than $1 trillion per year.
·         Look to technology. Similarly, technological advances are creating opportunities to drive sustainability solutions.6 Yet only 36 percent of respondents say their companies are mostly or fully integrating sustainability into their data and analytics work. Companies that want to capture increasing value in a resource-constrained world should spend more time thinking about how to integrate their technological capabilities into their overall sustainability agenda.
·         Focus your strategy. As sustainability becomes more central to the business, companies should align internally on what they stand for and what actions they want to take on these issues, whether it’s economic development or changing business practices. Whatever approach companies take, they should develop a strategy with no more than five clear, well-defined priorities—one of the key factors for successful sustainability programs.


Wednesday, July 30, 2014

ENTREPRENEUR SPECIAL................................... Many IIT grads quitting high-profile jobs to start their own cos in the $48-billion food sector

Many IIT grads quitting high-profile jobs to start their own cos in the $48-billion food sector

MUMBAI: Prasoon Gupta, Manish Goyal, Badal Goel — all graduates from the Indian Institutes of Technology, all with high-paying corporate jobs. Then they gave it all up to get into the food business, setting up individual ventures that form part of the burgeoning $48 billion food service business in India. In February, IIT Roorkee graduate Gupta quit his five-year-old venture

Tech Buddy Consulting and founded a new eating concept in Delhi that caters to more than 300 people daily. Sattviko is inspired by the sattvik way of life that emphasises purity and serves cuisine from India and across the world, such as Mexican, Italian and American that conforms to its rules, such as no onions or garlic. Gupta has roped in a chef formerly with the Taj Group who's constantly dreaming up new dishes for the menu.
"While the initial investment in setting the company, its assets and hiring people is high, we are looking at becoming a Rs 100-crore chain within the next two years of operations," said Gupta.

The two Sattviko outlets in Delhi generate daily overall business of Rs 35,000, he said. The company is in talks with venture capitalists to raise Rs 15-20 crore which will be utilised for domestic and overseas expansion in Dubai, the US and the UK in the next six months.
FRSH, based in the capital and started by an alumnus of IIT Delhi, serves corporate clients in Gurgaon looking for healthy food — fresh salads, sandwiches and health juices.

"Right now, FRSH serves corporate offices in Gurgaon and later we will start the service even for metro stations, schools and apartment complexes as we are targeting high density areas," said founder Badal Goel.
The company has so far invested almost Rs 50 lakh in setting up a centralised kitchen, besides technology and manpower. Several tech grads from the IITs and other reputed schools have, in the last few months, been attracted to the food business and started their own outlets and sites.

"It has demonstrated the potential to become a sunrise sector and has seen interest from private equity firms as well," said Ankur Bisen, vice-president, retail, Technopak Advisors. According to Technopak, the food service market is projected to grow to $92 billion by 2020 at a compounded annual growth rate of 10%. These IIT graduates are bringing technical expertise and systems from previous corporate jobs to the food business. All these entrepreneurs have set up centralised kitchens to maintain quality and eliminate wastage.

Last November, IIT Bombay graduate Manish Goyal quit a management consulting job and founded Foodies Compass, an online platform that solves the 'what to eat?' dilemma. 

"As a backpacker and traveller, there was always this problem of what to order due to lack of visual and credible sources. So, we introduced this website and app where people can see visuals of food before they order," said Goyal. Foodies Compass, which provides pictorial menus of more than 150 restaurants in Gurgaon, plans to expand to Mumbai, Delhi, Bangalore, Kolkata, Chennai, Hyderabad and Ahmedabad in the next one year.
There are scores of others who have made food their business. Pushpinder Singh, who has a masters in computer science from BITS Pilani and a BTech from IIT, has launched Travelkhana, which delivers food to railway passengers and has funding from Google India head Rajan Anandan. Chaayos, an NCRbased chai cafe which serves more than 25 varieties of tea, competes with established coffee outlets.

"There is a high demand for chai and because our products are priced lower, we see higher footfall and revenue than other major coffee chains like CCD (Cafe Coffee Day), Barista, etc," said Nitin Saluja, founder of Chaayos. An IIT Bombay graduate, Saluja opened Chaayos in 2012 after discovering a passion for tea. Several private equity firms and venture capitalists have pumped money into the food business, although their experience in the sector has been mixed.
The Indian Angel Network, a large group of angel investors, has invested in Poncho, a Mumbai-headquartered quick service restaurant (QSR) chain that serves Mexican food. Sequoia Capital has invested in the Punebased fast-food company Faaso's, which serves wraps. Helion Ventures and Footprint Ventures have invested in Mast Kalandar, a chain that serves north Indian vegetarian food. According to Bisen of Technopak, given that Indians are traveling widely and exposure to global cuisines is increasing, the food business is set to expand.

By Divya Sathyanarayanan, ET140729

BUSINESS SPECIAL .........How Old Industries Become Young Again

How Old Industries Become Young Again

Five indicators reveal when your sector is about to be transformed by dematurity.

When contemplating possible threats to their business, many executives worry about disruption. They see competitors with new technologies poised to capture their existing customers, and they know it’s better to be a disruptor than a disruptee. But disruption is often misunderstood. In fact, as New Yorkerwriter Jill Lepore points out (“The Disruption Machine,” June 23, 2014), many celebrated cases have been less disruptive than they were portrayed as being. What most industries experience as disruption is typically not a sudden change from one source, but the accumulated impact of a range of interacting factors. If you want to be prepared for disruption, it’s critical to understand the more gradual, prevalent, and multifaceted dynamic that underlies it: a phenomenon called dematurity.
Dematurity is what happens to an established industry when multiple companies adopt a host of small innovations in a relatively short time. Those seemingly trivial moves combine to rejuvenate the old mature industry and make it young again. The term was coined in the early 1990s by Harvard Business School professors William Abernathy and Kim Clark. They were thinking of the U.S. auto industry, which was undergoing a profound operational renewal, spurred by Japanese competition, the quality movement, and lean management. Toyota and Honda, with their superior production methods, did not fully disrupt Detroit. They dematured it. Instead of collapsing, the Detroit Three adopted their rivals’ tools and techniques, and the entire industry advanced to higher levels of quality and customer satisfaction.
You can think of dematurity as a crescendo of mini-disruptions that add up to great effect. It will hit most industries sooner or later; it struck sectors as varied as software development, entertainment, and defense contracting. It is happening right now in the U.S. in healthcare and electric power generation. In the long run, dematurity is a great boon, but it can also be terribly threatening to individual companies. Nearly all cases of dematurity have one thing in common: the genuine surprise of executives when it happens to their industry. It is all too easy to be caught off guard—to ignore the small changes that appear one by one, to fail to believe they will affect you, and to end up at the tail of the wave, outpaced by competitors who saw the possibilities earlier.
Nearly all cases of dematurity have one thing in common: the genuine surprise of executives when it happens to them.
The solution lies in gaining better sensitivity—in other words, improving your ability to recognize and respond to the signals of incremental change. This is difficult, but not because information about the pending changes is sparse. Rather, the signals are too abundant. News breaks of deals, partnerships, and market entrances or exits. Scholars, commentators, and business leaders talk of looming disruption. Some of that talk is accurate in its foresight, and some of it is hyperbole. It is difficult to know which is which.
Here, then, to help you sharpen your mental gauge for disruption and dematurity, are five often overlooked but genuinely prescient signals of pending industry change. They reflect more than 20 years of close observation of innovation launches in a variety of industries. These phenomena tend to arise when an industry is on the verge of dematurity. Look for early signs of these five changes, and you can better recognize the impact of today’s events—and the trajectory of tomorrow’s.
New Customer Habits

In the 1980s, most people who bought telephones installed them in a single location, connected them to the telephone network with a wire, and used them exclusively to communicate via voice. By the end of the 1990s, mobile phones were available with analog transmission networks. Consumers used them as portable supplements to their wired voice lines—a widespread incremental improvement, but not a dramatic shift in people’s habits.
Then digital transmission (2G and 3G) became available. In 2002, people sent more than 250 billion text messages. Before long, they began to integrate other functions—reading magazines and books, listening to music, playing games, finding places to eat in unfamiliar neighborhoods, and so on. This new group of consumer habits added up to a paradigm shift in everyday life. The same person who might once have carried a cellular phone, map, book, camera, Gameboy, and Walkman now could have one device serving all those purposes. By 2007, the year the iPhone was introduced, it was clear that major changes were coming in business and pricing models for a broad group of digital industries—electronics, creative content, gaming, photography, video, music—that had formerly operated independently of one another.
A similarly powerful paradigm shift is happening now in business-to-business IT with cloud- and Internet-based software subscriptions, known as software-as-a-service (SaaS). This sector did not exist before 2000. Formerly, nearly all corporate technology adopters bought the software they needed to run their businesses, and installed it on machines residing in their own facilities. Web-based software delivery models, known as application service providers (ASPs), struggled to gain enough scale to make money. They were hobbled by slow Internet speeds, non-modular software development practices, and a lack of cloud computing, and their offerings were too frustrating to be usable. Today, employees in companies of all sizes routinely access application services via high-speed cloud connections, a completely new customer habit that took hold only after incremental improvements in related technologies and practices propelled SaaS across a threshold of usability. The business is growing 20 to 30 percent per year; this, plus its clear link to new habits, indicates that it has only just begun to rejuvenate the software industry.
Not every promising technology fosters a customer habit. The Segway, a highly publicized, technologically ingenious self-balancing electric vehicle, turned out to be too unwieldy and expensive to reform habits. It has sold only about 50,000 units since its launch in 2001. Similarly, although the SodaStream home soft drink machines are widely distributed kitchen appliances, it’s not yet clear whether they have enough popularity to disrupt the carbonated beverage industry. Much depends on how many people prefer the convenience of never running out and the thrill of making soda themselves to the convenience of a prepackaged can that doesn’t need cleaning.
For every prospective innovation, whether you’re promoting it or facing off against it, seek out any early signals of new customer habits. The way people embrace or reject the innovation, and the logic underlying their response, will tell you a great deal about whether it’s a smartphone or a Segway.
New Production Technologies

When a new technology changes the way an established business produces its core product, dematurity often follows. For example, many auto insurance providers are changing the way they price their policies. Instead of classifying customers’ likely driving risk through actuarial statistics about gender, age, and location of residence—and thus getting only a rough statistical view of the habits and risk levels of individual drivers—they now use data collected from in-car diagnostic devices. This allows them to design more profitable products that return more savings to customers. MetroMile, a startup launched in 2012, provides a free device for cars that tracks mileage, driving patterns, and locations; it pays for this service with insurance policies targeted at urban residents who drive less than 10,000 miles a year and who pay by the mile. Progressive Insurance, a more established auto and home insurance company, uses its own in-car monitor called Snapshot to gather data, and rewards safer drivers with lower premiums.
The power generation sector—an industry that is controlled by large, semipublic semi-monopolies—is also facing dematurity because of new production technologies. Today, utility customers buy electricity directly from the companies that generate it. But the centralized, expensive infrastructure that has long been a strength of the industry is also a source of costs, inflexibility, and disaster risk. In particular, the hurricanes and other weather catastrophes of the past few years, especially the tsunami that hit the Fukushima Daiichi nuclear power plant in Japan in March 2011, have provided a wake-up call for many companies. Losses related to those events, coupled with the falling costs of fuel cells, solar panels, personal wind turbines, and other storage and power-management technologies, will probably lead many power companies to embrace alternative power systems and the digital grid over the next few years.
How do we know this long-awaited shift will finally happen now? Because the technology is crossing a threshold of effectiveness and cost efficiency. It also helps to recognize the complement of new customer habits: When large companies such as Google use renewable technologies to power installations like large server farms, it gives other commercial building owners and nearby homeowners more reason to change their habits as well. When the change reaches critical mass, the winning electric power companies will be those that move away from selling supply, and toward selling wind turbines, gas generators, and other means of production.
Another good example of production technology breakthroughs is digital fabrication. This newly prevalent technology is altering the foundational practices of most manufacturing industries. Fabrication machines use software to control 3D printers that can build components and products by placing hundreds or even thousands of layers of material—usually plastic polymers or metals—in specified shapes. As with many other technological advances, each year brings devices that are faster, cheaper, and more varied in their capabilities than those of the year before.
The technology has now reached a tipping point. More than two-thirds of U.S. industrial manufacturers surveyed in the 2013 PwC Global Innovation Survey reported deploying 3D printers in some way. Many of the machines are used to prototype new products. Early adopters report that their product development cycles are shrinking as they quickly design, build, and redesign products before launch. The technology also makes new supply chain value propositions possible. Companies can produce discontinued parts as needed on a 3D printer. Some manufacturing experts anticipate that the use of 3D printing will cause a US$3.4 billion annual drop in materials transportation costs, by enabling manufacturers to construct components entirely on site instead of assembling them from smaller parts made by multiple suppliers.
New Lateral Competition

There was a time when a family doctor had a near monopoly on primary care services. The doctor knew the patient, knew the family history, and was present whether in treating the flu or deciding a twisted ankle needed an X-ray. The only problem was the time it took to get an appointment, or the three-hour wait for the doctor to be free.
Today, the demand for accessible, quality healthcare delivered in a timely way has created an explosion in convenience providers. CVS’s Minute Clinic, Walgreens’s Healthcare Clinics, and urgent care chains branded to major health networks are offering relatively inexpensive, rapid, and accessible medical care. These cover basic preventive services such as immunizations, flu shots, and diabetes tests; treatment of sudden conditions such as burns, sprains, splinters, back pain, and migraines; and chronic needs, such as the management of asthma and high blood pressure.
A traditional family doctor might look down on these clinics as providing an impersonal, transactional service, but consumers don’t seem to mind. Visits to retail clinics in the U.S. tripled between 2008 and 2013. One recent study by the PwC Health Research Institute found that 45 percent of consumers across all age groups are willing to use alternative providers for a range of basic health services. Their options to do so will rapidly expand. CVS and Walgreens together have close to 1,000 clinic locations in the United States, and Walmart is getting into the game through an experimental partnership with Kaiser Permanente. These new healthcare actors are giving primary care providers and even hospital emergency rooms competition as the source of choice for quick, simple medical services.
The emergence of healthcare convenience chains is just one example of the dematurity that occurs when a new type of competitor appears—one with products and services that substitute for those of incumbents. Usually these involve lateral moves, the transfer of capabilities and business models from one sector to another, where the first sector has a completely different (and better) way of solving the second sector’s problems. Though they’re considered to be disruptive, lateral moves are not always that abrupt and clear-cut; they often occur in incremental fashion, with some incumbents (in the healthcare clinic model, Kaiser Permanente, for example) taking part. Thus, when you see a lateral competitor emerge, even in nascent fashion, it’s a good predictor of more widespread system change. Indicators visible today include the use of mobile phones for paying bills, and the increasing popularity of prefabricated buildings, which may revitalize some aspects of the construction industry, even in urban settings like New York.
New Regulations

Changes in government regulation patterns have an enormous impact on the type and intensity of competition in many markets. The passage of the Affordable Care Act, for instance, is adding millions of patients to the healthcare system in the United States. This places new competitive pressure on payors and providers, challenging both types of companies to raise the effectiveness and cost-effectiveness of their offerings. Suddenly, old players and new entrants alike see opportunities to keep patients out of the doctor’s office with fitness and nutrition tools like MapMyRun and MyFitnessPal, and diagnostic tools such as at-home strep throat testing kits. This kit has the potential to prevent 78,000 doctor’s office visits per year, valued at $94 million in physician revenue. Some of these diagnostic tools have prompted new regulations. For example, the U.S. Food and Drug Administration halted operations for the direct-to-consumer genetic testing company 23andMe, pending review of its saliva sample DNA test service.
Financial services, energy, education, transportation—all these industries and others are subject to new and revised government rules, each with its own form of regulatory push and pull. New payment systems such as bitcoin for online markets, or prepaid cards for physical use, are undergoing scrutiny by multiple agencies around the world. The carbon tax seems to be gaining momentum as one tool in the effort to curb industrially produced greenhouse gas emissions. And recent U.S. government relief for people with outstanding student loan debt may be just the beginning of efforts to use regulatory means to make a college education more affordable and to make evaluations of colleges more useful and accessible.
In general, emerging regulations give you a good way to anticipate change, even in areas where imminent change seems unlikely. For example, loosening regulation on the use of autonomous flying vehicles like drones will have an effect on investigative journalism, law enforcement, and insurance, along with the effects of their use in war and defense. Similarly, when regulatory relaxation appears imminent for self-driving automobiles, we can expect a major dematurity wave to hit mass transit systems, taxi services, the car rental industry, and presumably many other transportation-related endeavors.
New Means of Distribution

The advent of digital infrastructure has already thoroughly dematured media and entertainment—affecting formerly established business models for music, motion pictures, publishing, periodicals, advertising, and communications. Now it is dematuring the physical world as well. For example, consider what the online taxi dispatch service Uber is doing for personal transportation. Anyone who has been caught trying to hail a cab on a rainy evening in New York City knows that the system is in desperate need of an overhaul. As of 2014, there were fewer than 15,000 yellow cab licenses (called medallions) in operation in the city, and great peak pressure on demand: Everyone wants to use the supply of taxis at the same time. This is a classic distribution system overload problem.
Uber sets up a new distribution system that overcomes the limits of the old one. It allows riders to log in to the system and indicate where they are and where they are going. The Uber app then responds with a wait estimate and often a fixed price. Uber has moved the distribution off the street corner and into the mobile device, which tells riders how much their ride will cost based on real-time demand, weather, distance, and current traffic conditions—take it or leave it. Instead of wondering how long it will take to hail a cab, taxi riders feel the sense of certainty that a better distribution system often brings. Whatever happens to Uber the company, we can be certain that taxi management systems like the one it has developed are here to stay.
Business-to-business environments are similarly affected by emergent distribution shifts, like the one signaled by Monsanto’s 2013 acquisition of the Climate Corporation. Climate is an agricultural service provider that sells crop insurance and delivers it in conjunction with in-depth analysis derived by crunching data pertaining to such variables as weather and soil composition. Agricultural clients get real-time advice about when to plant, weed, or fertilize. Seemingly small adjustments can have a huge impact on farm yields. If Monsanto chooses to bundle its seeds with insurance or data services as a result of this deal, it will change the distribution system for agricultural insurance.
Leading in Dematurity

One of the few certainties in business today is that dematurity is coming to your industry, and soon. Responding effectively requires that you throw out old assumptions about how value is built and sustained in your markets. You need to ask questions about your industry that others believe have already been fully, inexorably, answered: What makes for efficient scale? Who is the competition? Who are the customers? What do customers want? Who owns what? Where is the risk?
If asking these questions and pursuing untraditional answers seems like an unlikely path to success, consider this fact: More than 80 percent of the self-made billionaires who are profiled in my upcoming book, The Billionaire Effect, made their billions in mature industries that they reinvigorated by tackling one or many of the factors identified above. They either introduced a product attuned to new consumer habits, changed the technologies of production, adopted ideas from another industry, adapted to new regulation, changed the distribution system, or made some combination of those moves. Elon Musk, CEO of Tesla Motors and SpaceX, challenged the internal combustion engine’s dominance in the auto industry by developing a customer-friendly electric car. Farallon Capital Management founder Tom Steyer worked laterally: He created an investment vehicle for university endowments and changed how those customers defined profitable investing. Alibaba founder Jack Ma created one of the largest e-commerce sites in the world by taking advantage of production and distribution changes inherent in the Web to provide platform and infrastructure services to thousands of small businesses.
Although dematurity is inevitable, your business can be the one that benefits most. Half the task is recognizing the facets of impending change early enough to prepare. The five indicators in this article provide you with a starting point, a way to begin honing your judgment and identifying the real threats to your industry. The other half of the task is to respond in a way that makes you stronger: by assembling and integrating the capabilities you’ll need in this new, rejuvenated marketplace. The right capabilities will probably be a combination of what you already do well and what you must learn to do from scratch. If you can set your company up to sense and respond to dematurity ahead of time, then you’ll be one of the first to catch the big wave of small changes—before everyone else in your industry gets on board. 
By John Sviokla is a principal and U.S. advisory innovation leader with PwC. He also leads the Exchange, a think tank for business leaders. He is the coauthor of The Billionaire Effect: What Extreme Producers Can Teach Us about Breakthrough Value (with Mitch Cohen; Portfolio, forthcoming).