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So you have probably already read about Exxon getting kicked out from Dow Jones, being replaced by Salesforce
Salesforce inclusion in Dow is no surpirse for me. Marc Andreessen (co-founder of Netscape Navigatore) once said -“Software eats physical retail”. While the statement was made in context of the retail industry and was ,and have been, much debated, I belive it is relevant in this context as well. SaaS and PaaS platforms will dominate the world of business now. Digital will eat legacy for breakfast. All companies will HAVE TO evolve into Digital businesses and many will have to develop platform based operations. (See my article on this blog on why CPG companies will have to become Tech platforms: https://smartsupplychains.ai/2020/08/14/to-survive-and-thrive-cpg-companies-must-transform-into-tech-companies/).
So Salesforce’s inclusion is no surprise. And to be brutally honest, neither is Exxon’s exclusion
Becoming a legacy company is the result of a mindset
Companies like Exxon, at many points, were very “Resourceful” due to the Oil boom. That additional resource ($$$) could have been invested in charting new ways to operate, exploring new ideas to leverage their O&G infratsructure to diversify and expand products and services. Instead, companies like Exxon spend millions every few years to do studies that suggested the same “improvements” in existing processes and operating models, every 4-5 years. Any subsequent implementations of these “improvements” gets nullified in 4-5 years, starting the process again.
And now it may be too late to re-configure ? There are aspects the likes of Exxon Mobile can try diversifying into. I can think of few areas but they are not within the scope of this article. The challenge is that a company the size of Exxon, if it now tries embracing any radically transformative ideas to stay relevant, may not be able to “transform” in time. The right time to start that transformation was maybe a decade ago. But they were probably busy paying three different external partners to study how they can keep optimizing exisitng processes and comparing them with slides from three different studies done 5 years ago ?
Effectively working on finding efficiency opportunities in existing processes is no crime and makes perfect sense. But if the relevance of existence of those processes themselves are in danger, a higher priority should be to experiment and strategize to evaluate how you can expand your business model/re-orient models to stay relevant for next few decades. And no one devised a rule that said both of these initiatives can’t run in parallel.
Don’t Manage the Sh*t out of your present- it is the future that is at stake
This is not only Exxon’s problem. Or Oil and Gas problem. Every other Industry grapples with this. We are all trying to live and survive in the present. And the problem is that in the process of doing so, we are developing a talent pool that also thinks in the present, but that is also outside the scope of this article.
Much before Covid19 hit us, in June of last year, I wrote a post on LinkedIn on why companies should not get too lean in a recession (I was expecting a recession in a year or two, but not in this form)- that our “Just in time” approach is the result of living in present. And now, everyone is talking about why “Just in case” makes more sense- but if some companies would have thought about this an year or two ago, they would have absolutely crushed it during the pandemic. If you have been following my blog site, I have written about importance of Omnichannel for retailers for years, suggesting that the online presence that retailers have is merely symbolic and needs to be extensive. Now every retailer wants a heavy eCommerce presence- but after already experiencing Covid19 disruption.
Manage the present effectively but the ONLY way to be successful now is keep an eye on the future and effectively keep planning for mid term and keep building foundation for the long term.
Views expressed are my own.