More from Ken
It is tempting to disparage Blockbuster, Borders, and other companies that have suffered highly public business disruption at the hands of the internet economy. From the comfortable position of hindsight, it is hard to conceive that Blockbuster would not have understood that consumers would prefer streaming video to crowded parking lots and late fees, or that Borders would not have foreseen that Amazon’s easy online ordering and near-infinite selection would decimate Borders’ stores. Even more perplexing in hindsight is that, once the threat was obvious, Blockbuster and Borders did not act more decisively to stay relevant.
Yet, the fact that these companies were unable to successfully respond to disruption is not an indication of their ineptitude, but of the enormous complexity involved in reinventing their companies for an unpredictable future.
First, they needed to recognize a rapidly emerging and entirely new delivery and business model. It is hard to recall how novel e-commerce seemed in 1997, when Amazon was still just a bookseller, or how novel streaming video seemed in 2007, when first launched by Netflix. These were groundbreaking concepts whose business and social implications were hard to grasp and whose unprecedented rise was nearly impossible to predict.
Second, had they recognized the scope of the threat, leaders at Blockbuster and Borders would have needed to envision an entirely new role for their companies within a new business model. That role would have required entirely new capabilities, while many of the companies’ existing characteristics—for example, a heavy real estate portfolio—would have been major impediments.
Third, Blockbuster and Borders would have needed to make a difficult pivot to this new, unknown role, redirecting significant portions of capital, rapidly acquiring new intellectual and technological capabilities, and transforming the companies’ cultures.
Fourth, while this massive and rapid transformation was taking place, Blockbuster and Borders would have needed to maintain their high performance in the existing business model to have the financial strength to make the necessary transition.
In short, Blockbuster and Borders would have needed to focus simultaneously and successfully on three timeframes with three different requirements: now, near, and far.
Now, Near, and Far Defined
Jim Hackett, CEO of Ford Motor Company, developed the concept of “now, near, and far” while he was CEO of Steelcase. He insisted that now, near, and far were not a continuum, but three dimensions that required simultaneous and equal attention. As we gain more experience with disruption arising from the internet economy, we gain a more nuanced understanding of the interdependent and sometimes conflicting demands of these dimensions:
- Now: Be successful in the “now” while also making the critical pivot to the “far”
- Near: Place bets on the future and pivot resources to support those bets
- Far: Envision a future state and future role, knowing that any prediction is uncertain and subject to change
The now, near, and far framework is getting a major test as Ford confronts a new world of mobility, from self-driving cars to scooter sharing. Against a backdrop of weak sales and stock price, Ford finds itself needing to devote significant attention, resources, and creativity to now, near, and far simultaneously. For example:
- Now: Ending sales of sedans in the U.S.—frees up $7 billion to support electric and autonomous vehicles
- Near: Transforming F-150s and SUVs into electric vehicles with autonomous features
- Far: Develop the right portfolio to support multiple modes of transportation working together in connected, consumer-centric systems
The Power of Now, Near, and Far
Blockbuster and Borders were understandably overwhelmed by the complexity of balancing now, near, and far. Those companies existed in a time when the five-year strategic plan of a successful company rarely called for its complete reinvention. The internet economy has changed all that. High-tech companies now compete for revolutionary ideas that will fuel rapid growth. This sets a pace that legacy companies struggle to match without major pivots in cultures, capabilities, and roles.
“Now, near, and far” is a powerful framework for organizing the complex options facing legacy companies in the internet economy. The framework allows executives and boards to isolate the specific strategies needed to succeed in the current business model, and to transition to a new business model. It allows executives to prioritize the strategies with the most direct impact on success in a new business model. It allows executives to manage the timing of those strategies as the organization pivots from the current business model to a new one. And it gives executives a simultaneous view of performance critical for success in all three dimensions.
In a recent issue of The Wall Street Journal, Ford took out a full-page advertisement with stark blue type on a white background. As these excerpts show, the ad expresses the critical balance of now, near, and far that could apply to legacy companies in any industry:
Now: “We are proud to be an automotive company.” Near: “We have been thoughtfully and methodically making our way into the future for over a century.” And far: “We believe in having the longest view in the room.”
Ford’s success in pivoting from “now” to “far” is by no means certain. The company is facing powerful headwinds of technological and socioeconomic change. In Ford’s favor, however, is something that Blockbuster and Borders lacked: a powerful intellectual and strategic framework to guide its transformation.