In the second part of this series I examine, the Digital Content explosion and access to credit.
2006: We were probably aware of the digital content haystack we were building and we knew we couldn’t find that old PowerPoint presentation or spreadsheet but it wasn’t impacting on the performance of the business, was it? We were beginning to create more and more web sites, wikis, blog entries for all sorts of projects and creation was becoming really easy with free tools and we knew it was getting out of control.
2010: Information/Content Governance is now a Board issue (just like Corporate Governance & IT Governance came became priorities in the previous two decades).
Regulators in the Pharma Industry are demanding to know the content of your web sites with respect to drug information published on any given day. Proof of published data is an imperative. Snapshots of web sites are needed, 24/7. Does your IT system allow this to happen? The symptoms are pouring in that we have lost control. Social security numbers are inadvertently published on web sites. Breaches of company’s web policies are incurring heavy penalties. E-discovery is becoming increasingly time consuming and expensive.
The control, cleanliness, publication and utilization of digital content is impacting on the leadership team’s ability to execute their strategy. (See Research on Web Governance and Managing the Explosion of Information)
Access to Credit
2006: Raising finance for a business whilst never easy was possible and there were choices. Bankers had even moved on from purely asset backed financing and were prepared to look at companies with thin balance sheets (software and recruitment businesses spring to mind) but that possessed strong cash flows. The equity markets were free flowing and gearing to support deals was reaching all time highs. Banks were open for business.
2010: To say the availability of credit is tight is like saying Rodger Federar is accomplished tennis player! The environment is grim. Revolving credit/overdrafts are not available in so many situations. The VC industry is struggling to define the market it wants to support. The PE industry is assessing what deals it can complete with little or no debt support. Businesses need to generate their own working capital for growth. No wonder recruitment is so weak and expansion is slow. However lean thinking is not all bad. Zero based budgets that demand clear, simple strategic objectives are a good thing. Visualizing how a new product will make money is a good thing. Defining every employee’s role, with respect to bringing in new business is healthy. If you are not building it or selling it, what exactly is your role?
(Hint: there are some) This is a time for streamlining your best products and aborting cash sucking pink elephants. It is particularly important to visualize a smaller profitable business than a larger loss-making dream (of course a great VC partner can help you do a lot of damage in a market and play a longer term game). Be aware of all the sales scenarios that deliver breakeven and continually tweak pricing and business models until you can rely on a sustainable model.
Give me your thoughts. Next post I’ll be taking a look at staff engagement.