I love this quote, for one of my favorite authors, who wrote: "The pandemic is a portal." And she said, historically pandemics have forced humans to break with the past and imagine their world anew. And this one is no different. It's a portal, a gateway between one world and the next, I would argue we are definitely in this new world – a new world where COVID and Generative AI are going to define the future.
In a recent study 64% of companies could not see beyond the tier one suppliers. That means, if I have a company that supplies to me, most likely I can't see beyond that company.
Why is that important? Well think about it: how do I assess my risk exposure? If I have no idea what the risk exposure of my supplier is? How far does that supply chain go? And some of the crises that we saw with the microchip shortage, well, those shortages actually, occur far down the chain. They tend to be buried in third tier, four tier. And those would trickle down to me. And if I have no idea how far that goes, I wouldn't even know that it was coming.
What enterprises are also talking about and looking at, they're all looking at some ways to restructure whether they're enterprise or where they source, how they source. 94% are telling me they need help. They want to build in agility, they want to quickly pivot.
One of the CEOs that I spoke with said, "what's happening is a lot of companies right now are trying to acquire tech solutions, and adapt them to their current processes and their current models." But he said it's actually really similar to basically trying to digitize a horse and buggy, when your competition is actually creating a digital auto.
Rather than assuming that your old business model is perfect, and then applying technology to speed up processes to create efficiencies, I would say what I'm seeing leading companies rethink what that model looks like. And it doesn't mean that you're going to jettison it. It just requires they rethink it, and maybe modify.You need to be resilient, you have to build it into your organizational structures, into your supply chains, how you source, how you deliver all of it, that entire ecosystem.
The supply chain indicates how we collaborate, believe it or not, one of the things that CEOs have been saying to me is that relationships are now more important than ever. Relationships are now more important than ever.
Keep up with the new business environment. You will have no choice. And it's very difficult because on the one hand, you are in your world where you are busy, you are dealing with day to day issues. You've got to create a task force a team, somebody that is keeping you abreast so that you can see all the changes that are going on. Geopolitics alone, trade issues, policies, they all impact business, and they cascade and collide with all the other issues. The biggest mistake or one of the biggest mistakes is that companies are not marrying these disparate issues. AI can't do that either. It's human judgment. And what we call domain knowledge.
Domain knowledge is what most of you have. If you've worked in an industry where you say, I know my business, I know my customers, I know my suppliers, I can call them up and they pickup. One CEO said to me, nothing replaces relationships, and the longer it is the better. Revisit your business model. No matter what it is.
