Studying the impact of innovation on business and society

Sorry, We’re Closed: The Rise of Digital Darwinism

I am not a social media expert and my new book, The End of Business as Usual, is not about Social Media. If you’re looking for the Top 10 ways your business can succeed on Facebook or Twitter, secrets to attracting more followers or likes, creating viral videos, or the best practices for creating infographics that over simplify the complex world of business, save your money. There is no shortage of useful books and resources out there.

Don’t get me wrong. While important, social media only plays a part in this (r)evolution. The customer journey is evolving. How businesses react and ultimately lead the enhancement of relationships is not determined by technology. To get closer to customers takes a culture of customer-centricity, a culture of empowerment, and a culture of innovation. But that’s hardly enough to convince business leaders that the customer revolution they hear about is literally steps away from their front door. Someone has to make the case however.

The reality is that most executives don’t use social networks. And, to be honest, most don’t read their own emails. Many won’t ever see this post. Trying to convince decision makers that this is a war fought on the battleground of social networks is in of itself fighting a losing battle. That’s because the future of business isn’t tied to the permeation of Facebook, Twitter, smartphones, tablets or real-time geo-location check-ins. The future of business comes down to relevance and the ability to understand how technology affects decision making and behavior to the point where the recognition of new opportunities and the ability to strategically adapt to them becomes a competitive advantage.

But make no mistake, this is as much a technology revolution as it is a series of real world revolutions that have and will continue to spring up in front of governments, businesses, and anywhere else it takes to be heard and bring about change.

Occupy: Madrid, Spain

A recent advertisement produced by Babson College cited a rather humbling statistic: “Over 40 percent of the companies that were at the top of the Fortune 500 in 2000 were no longer there in 2010.” As we’re often painfully reminded, history has a way of repeating itself.  Forbes published an article in early 2011 that served as a harbinger for the turbulent and transformative times that lie ahead. The opening line read, “The End is Near: Why 70% of the Fortune 1000 Will Be Replaced in a Few Years.” Startling and sensational yes. But far-fetched? No.

The author cited a study published in the book Built to Change by Edward E. Lawler and Christopher G. Worley. The study found that between 1973 and 1983, 35 percent of the top companies in the Fortune 1000 companies were new to the list. Over the next decade from 1983 to 1993, churn jumped to 45 percent, and then soared again to an astounding 60 percent between 1993 and 2003. If the current trend continues, over 70 percent of Fortune 1000 companies will turnover from 2003 to 2013. As the author observes, “In other words, over 3/4ths of the existing captains of industry will fall from their throne.”

This is about Digital Darwinism, when technology and society evolve faster than the ability to adapt.

In this video alone, try to count the number of companies that you’ve supported over the years. The number of companies no longer here or on the verge of obsolescence is unsettling. There were so many in fact, that not all could make the cut.

This a about the survival of both the fittest and the fitting. And it take more than a presence in new channels to improve customer experiences and relationships. It takes courage. It takes persistence to break through resistance. Everything starts with articulating a vision for how your business will invest in customer relationships and experiences. From there, technology, processes, and systems will serve as enablers for that vision. In the end however, it is leadership and an empowered culture that will bring about transformation.

Many follow, but very few lead.
Many compete to survive, but few compete for relevance.
Do we listen to our customers? Do we truly understand them?
Do we create experiences or do we simply react?
The future of business comes down to one word…change.
This is a new era that redefines everything.
An era of empowered consumers and employees.
Will we fall to natural selection or will we rise to lead the revolution.
This is our time to make business relevant.
Because people, after all, are everything.


Order The End of Business as Usual today…

54 COMMENTS ON THIS POST To “Sorry, We’re Closed: The Rise of Digital Darwinism”

  1. Elaine Fogel says:

    Hear, hear, Brian! I agree – there’s no success without a customer-centric culture.

  2. Matt Maresca says:

    Excellent, excellent!  I think the key to the future–even more so than now–will be that things change at a rapidly increasing rate.  It’s not about getting ahead of the change as much as it is being willing to change, and a lot of the change that is necessary can be discovered directly by listening to customers.

  3. Brett Hammond says:

    Thanks for breaking free of the social echo chamber; on to bigger things.

    Interesting studies regarding Fortune 1000 churn. Would be interesting to see churn of leaders/executives within that list as well.

  4. dragosilinca says:

    Taking a customer-centric approached has been gospelled since the 1980 when CRM came onto the scene. Marketing and customer service started to change to reflect this customer centric approach. So this is nothing new. It’s just that the internet, mobile and social has accelerated this pace faster and faster and companies are struggling to catch-up. 

    So technology is important. Not in the sense that some specific solution will solve this problem for brands, but in the sense that it is the underlying canvas where this transformation is being played out. 

  5. werwolf says:

    first, let me be a wise-ass for 2 sentences: ‘darwinism’ is absolutely the wrong word to use in this context. it only enforces the already skewed view many people have of what darwin’s theories were actually about.

    now on to your post. i think you’re absolutely right.
    there has to be a focus on the customer and this has to turn into a basic tennet of your business. but to understand your customer you’ll have to understand his/her culture. and i think this is where the real problem is buried. there is no unified culture anymore that can be tapped into by regional, low scale businesses. only broad patterns applicable to mega-size and beyond business. which means that a business, to understand its customers, will have to turn to individualistic measurements. which easily turns into a sea of unmanageable data. which, to be able to cope with, has to be automated or categorized. which in turn is prone to wrong decision-making because it turns individual data into statistics. something that never has worked, no matter what people tell you. [it was always only pure hit-or-miss luck with these matters.]

    so, where do modern businesses turn to in order to get their data, get their customer and GET their custumoer? in my opinion these business need to turn a lot of their control over to their customers, find was that are engaging for the customer but at the same time help the business to cater to their customers needs and wishes.

  6. Anonymous says:

    Just read everything you can about Steve Jobs and Apple’s Corporate culture!

  7. Anonymous says:

    The rise of Social Media Marketing has evolved from the changing mindset in today’s business world.  Social Media, itself, didn’t drive the mindset change, it just came along at the right time and was tweaked to accommodate the needs of modern business as seen when a few savvy businesspeople saw the marketing and sales potential it brought with it.  After all, Social Media was originally embraced by teens for personal commuications.  Then, came the adults and next came more sophisticated platforms and tools making outreach to everyone, easier.

    Businesses have been attracted by the growing numbers of users online, who can be influenced and marketed to in real time.  Globalization fit nicely into the picture, encouraging more and more companies to market their products and services – through Social Media – to people around the world for basically lower cost and in real time. 

    The business mindset since globalization took hold has been “you snooze, you lose.”  The world of business immediately realized that they are “virtually” open for business 24/7, so Social Media became Social Media Marketing; a way to reach more people – quicker, cheaper, where they hang out and at all hours.  The double-faced tape that holds businesses online is that there are not only sales opportunities online, but also customer complaints and competitive challenges that both must be addressed.  Today, a business can wither and die between the time management goes to sleep at night and wakes up in the morning.  This is a huge part of the mindset change.  No more “Ward Cleaverism,” which used to freeze frame the work day (along with its threats and risks) between closing time and the next day. 

    No, CEO’s are not interested in hanging out online, themselves.  But, they are realizing that Social Media requires their company’s attention and participation.  Like anything else, senior managers are most interested in the metrics (not so much the tactics), since focus and revenue are effected and must be closely monitored for success.

  8. Anonymous says:

    Think about this. I get more business from Google as opposed to social media.

    People have needs.They go to Google, and it routes the customer to a business

    they “need”.  Social media is basically blasting what you don’t need in your face

    24/7 .  And a place for customers to whine about bad experiences.  Google still is #1

    for a reason. 2. I come from the printing industry.  That industry is sinking faster

    than the Titantic.. It’s funny how they try to keep it from sinking. It’s too expensive !

    Social media has a purpose. It’s just not going to be as big as people think it is.

  9. eyeBrand says:

    Those brands mentioned that have gone away fell victim not only because they didn’t listen to customers but also because they ran their businesses pretty poorly.  Supply chain issues, product irrelevance, apathy, arrogance, etc. 

    What social gives brands is the ability to connect with customers about what they want from your brand.  Werwolf said it best in the response below – customers have the control.  Brian, you identified the problem brands have at the top.  Execs see social media as a just another complaint channel instead of where their next big product idea will come from or what their biggest competitive advantage will be.  They manage social media like another help desk. 

    Until brands internalize the insight that Steve Jobs had, Fortune 500 companies will continue to rise and fall. 

    Social is a channel.  Whether companies like it, use it, invest in it or ignore it, it IS the place where your customers and potential customers are.  It has to be treated like the multi-faceted and instrumental department that it is.  It is the R&D, customer service, legal, human resources, competitive shopping, product and customer research, consumer behavior study and public relations department (try putting that on your business card).

    The next churn in the Fortune 500 won’t be because the economy killed the companies but because they chose to ignore their customers. 

    twitter: #eyebrand

    • Hal O'Brien says:

      “Until brands internalize the insight that Steve Jobs had, Fortune 500 companies will continue to rise and fall. “

      Since you don’t say what it is (and it’s not part of the article), what’s the insight you believe Jobs had?  I’m curious to know.

  10. @briansolis:disqus  You nailed it. The medium is strong but seldom understood by the executives who make the decisions to be more than a buzzword. 

  11. Rory Webber says:

    Thanks Brian. I haven’t got around to buying the book yet, but your blogs are doing their job and I’m more tempted with every post!

    On to your post, which I think means that business leaders (indeed all leaders) need to listen to and respond favorably with their various audiences or face ‘extinction’. Who couldn’t agree? T’was ever thus right? 

    What I find interesting is how social media provides the opportunity to do just that, but is so easily dismissed by some business leaders. Are they too focused on short term goals, led perhaps by shareholders?

    If so, I think this (r)evolution will lead to more companies owned and run by the people. Credit unions, co-operatives and more ‘social’ companies will increase. Companies owned and continually ‘co-created’ by the people will be more likely to succeed. Simply because they will care more about their audiences’ long term satisfaction, than short-term P/E ratios. 

    What do you think?

  12. Anonymous says:

    I am not surprised by these stats, nor worried. Business is quicker, more agile and adaptive then ever before. More people are becoming leaders, with fewer followers.  The reality is that whoever is #1 better fight their hardest to stay there, as copy cats, smarter teams, and adaptable business models can quickly swoop in and take over. Think RIM to Apple. LivingSocial to Groupon. And now Pinterest to Google +.  Who will come out on top and stay there is the one to adapt to change the quickest. 

    I disagree with werwolf. Darwinism, at it relates to species, is the survival of the fittest (And the one quickest to adapt) It is a great metaphor for current businesses. I don’t think there was intent to skew the real definition of Darwinism rather then there was a reason to use that philosophy as an example of modern day business.

    • werwolf says:

      renee3, thanks for taking the time to read my post. [that’s worth something right there.]

      but, no, darwinism is not “survival of the fittest” – that is actually a lamarckian stance that has been mapped onto darwinist theory, obviously because both evolutionary theories focus on adaptability and need to adapt. and i think it’s important to keep that in mind when using the metaphor for business strategies. it changes your approach and will decide if you’re a quick burn-out success or a long-term steady one.

      that being said, i’d agree with you, basically in saying that the one who’s quickest and best to adapt will go on. on the other hand, with communication and the internet evolving as they are, it’s very hard to see what to adapt to and what’s just a “fad”. therefore i’d propose – staying within the framework of modern capitalistically oriented business, which something that will actually go extinct within the next 50 or 100 years imho – to extend brian solis’ accurate argument with a catalyst/controller module: your customers are forging your enviroment therefore they should have power over your evolutionary direction (even if they don’t know it).

  13. Jac Xu says:

    Brilliant video, it is really true, even the marketing is different between 2009-2011, when I went to business school.  What we taught in school about the traditional marketing is lack of marketing now.  Followed by the technology improvement, marketers will have more and more different channels to reach customers, also have to develop different strategy upon every channel to meet customer’s satisfaction and market needs.  Listening to customers will be the accurate orientation now to sustain longer in this marketing revolutionary era.  Engage and interact with them to get customer insight, being always in beta stage to continuously optimize marketing strategy, to adopt more advanced channel quickly and find out the best solutions for the products and services is the only way to survive.

  14. Chris Voss says:

    Incredibly Awesome Post Brian.  Nailed it.

  15. Such a deceitfulness moment for those who suffered with the same instance. Good to read this article and its really useful for me to aware about some of the noticeable debate.  

  16. Now that is a video to get you to read that book!  Great post and great video.  The future is here now so we should get ready today.

  17. Sailorgal1954 says:

    brilliant video Brian.  Now if we could just get small business owners to pay attention….

  18. Anonymous says:

    Thanks as always, Brian, wonderful post/video/book.

  19. Drill Rigs says:

    The concept of making a stand for a difference is noble, but the ability of some of the people “in power” is limited by their own monetary constraints. If someone offered to meet every demand being made, to protect the interest of the people who would lose money, the helping hand could be replaced.

  20. interesting! information! thanks a for sharing!

  21. Great Video Brian, and the book look great to, we need to CHANGE in everything, greatings from Venezuela

  22. Diego says:

    Cheesy. Yes, I said cheest

  23. Great article Brian, Great words…as usual 🙂

    The future of business comes down to one word…change!
    This is a new era that redefines everything….I add to reinvent!!
    An era of empowered consumers and employees…. managing relations for branding and  employer branding goals is king! 

  24. Bfeldma says:

    Awesome post. As customers become more aware and are given easier access to information, the business world is becoming more competitive. It is making it harder for these businesses to maintain success. But more importantly, as the article points out, good strategy starts with a vision. Smart businesses use technology in creative ways. Adapting means really learning how to use your resources in a way that will connect with customers!

    Britten Feldman
    Freeman School Student

  25. Jay Oza says:

    CEOs spend lot of time with other CEOs, because that’s where they believe power resides.  This is not the case today.  They can’t understand that a person with a Facebook page or a Twitter account has power to make them very uncomfortable or reverse their decisions.  This is not what they have been taught or seen before.  They need to spend time on SM and Internet and be actively involved otherwise they are hurting their company.  

    • Jacob says:

       I’d agree, but I also think CEO’s need some degree of SM training before you fling them into the field. It might be better in most cases to just allocate these activities to someone in marketing or communication. Create a “Mouth of the CEO”, as it were. I don’t know if every CEO is ready for the fluid sort of conversation that arises online. Would you agree?

  26. Matt Brennan says:

    Looks interesting. Can’t wait to check it out.

  27. Napda2 says:

    This article is interesting. Most people talk about how Facebook and Twitter and the social media are changing businesses, but I found it interesting that this article mentions that most CEO’s and executives don’t even know how to use these sources. Technology is expanding and changing, and the heads of companies need to be trained to take advantage of new resources.

  28. Thank you so much for this post.I found lots of interesting information here.

  29. Joy Schoeph Helfrich says:

    How can we ignore such a rally cry? Well said, Brian. 

  30. Madeleine Kingston says:

    A brilliant post Brian Solis and powerful video. The importance of citizencentricity, though not a new concept can never be too often stressed. In terms of promoting a message, sharing links and information with the view to influencing policy change or at least trigger action though, I think social media has an important social marketing role if effectively used.

  31. Cameron Franey says:

    Digital Darwinism is a very strong idea. The idea that a
    company is now forced to listen to its customers is something that it seems the
    dinosaurs of the corporate world are finding hard to grasp. The Mad Men
    mentality of those that spend the most money on advertising get the most
    profits seems to still persist throughout the business world. Just look at the
    Super Bowl for example; companies are still spending millions of dollars on
    outrageous advertisements in the hopes of catching the eyes of viewers
    everywhere. That’s not the case anymore though. It’s more important for
    companies to listen and interact with their customers than ever before. The
    Darwinian reference of adapt or die is the perfect metaphor for current public
    relations and advertising.

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