On May 22, 2010 an American software developer called Laszlo Hanyecz bought two pizzas from Domino’s Pizza for 10,000 Bitcoin. It’s a historic transaction because it was the first time that Bitcoin was used to buy a physical product. Cryptocurrency fans across the world now remember this each year with Bitcoin Pizza Day every May.
The price at Domino’s Pizza varies, depending on your choice from the menu, but the UK prices right now are about £17 or £18 for a large pizza. Let’s round it up to £40 for two large pizzas.
In May 2022, the value of one Bitcoin in GBP is about £31,000. This means that this initial transaction valued two pizzas at over £300 million. Let’s hope that Laszlo kept a few coins and didn’t buy any more pizza.
I’m recounting this story because the anniversary is this month, but also because I think it’s a great example of just how difficult it can be to see into the future. We can all extrapolate from how something worked in the past and assume it must be the same in future, but that’s not always true.
How can business leaders take a look at their company in 2022 and future-proof their business? How do you accept the difficulty of predicting the future and transform your business so it is ready to adapt, whatever happens?
The business magazine Forbes published a list of five important steps all leaders need to take. To summarise all five:
- Build your architecture around change and agility
- Accept there is no ‘end state’ and plan for continuous change
- Build your corporate philosophy around trust
- Explore information on your customers
- Integrate trust into products and services - consider your approach to ESG (Environmental, Social, and corporate Governance)
I agree with these broad steps, but I would personally simplify this even further by suggesting that the entire approach can be reduced down to one statement: Be ready to change and do the right thing.
Take ESG as an example. It was often considered to be a marketing function designed to make a company look good. ESG initiatives showed the world what a great corporate citizen your business was. But now, investors want to know the reality of your ESG strategy before they will invest. Potential employees are asking about it at job interviews. Existing employees want to feel that they are not just punching the clock each day - there is a bigger picture to their job. Clients are answering to their own board and asking suppliers to confirm their commitment to ESG.
Doing the right thing really matters if you want to attract and retain the best talent, clients, and investors. This isn’t just gloss on the annual report.
The first couple of points Forbes makes also ring true. Management consultants have talked for years about the ‘future state’ of a business. They ask executives to define how their business should look and then create a transformation timetable that leads from here to there. Usually these transformation plans can take years.
Nobody has that luxury today. You can only build a corporate architecture that facilitates agile change, rather than planning for the way your business will look in three years. Strategies such as cloud applications and storage, CX As A Service, and genuine partnerships with specialists can prepare you for change.
Business School papers are filled with examples of companies that didn’t see the future coming, but they don’t give the full picture. The collapse of Kodak is a good example. Kodak invented digital photography. When Kodak collapsed, overtaken by digital rivals such as Instagram, they were already exploring a digital photo-sharing service, but they had assumed that customers would always want prints - not just an image on a phone.
If Kodak had been just a little more agile, they could have transitioned into digital photo sharing - they had all the experience and processes in place. They just didn’t have the ability to change as quickly as customer behaviour.
It’s that ability to change direction that creates a future-proof business. Nobody can predict the future with any certainty, but building flexibility and the ability to change direction creates a business that can succeed whatever the future brings.
Let me know what you think about the best way to future-proof a business. Would you add to the steps listed by Forbes? Leave a comment here or get in touch via my LinkedIn.