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Deloitte report | “The Shift Index: Recession masking long-term competitive challenges”

Deloitte put out some good stuff, but this one is superlative.  The context here is is for planners thinking about the future and wondering how to think about the future.  That context is hard to achive with so much information, and so much new information every day.  For example we have all seen and heard the Iran/ Twitter discussion, and impacts here and here.  We have seen government influence Twitter to keep the ‘people influence’ moving.  We see internet advancing rapidly, Google supposedly taking over advertising, yet Facebook with over 200M users, actively resisting advertising.  We see online banking growing rapidly, yet banks are stuck with expensive branches and staff in them.  We see concerns about bandwidth yet it grows inexorably.  We see PR and Marketing continually trying to force fit old methods into new models with little success.

These are simply examples that point to the understandable confusion both for planners, and for the people they must show their plans to.  Everyone is a participant personally as well as corporately in the 21st Century changes, and we need better mental models to work it through.

In short there are too many data points, and too many of them are seemingly contradictory.  One thing we all agree on is that things are changing, yet what is happening, and how can I make rational projections within these changing times that support planning for the next 2 – 20 years?

Enter this new paper from Deloitte with a well constructed index that looks at three indexes they refer to as waves:

The Shift Index:  Recession masking long-term competitive challenges | Deloitte Center for the Edge [121 page pdf link off this page]

Deloitte’s Shift Index pushes beyond cyclical measurement and looks at the long-term rate of change and its impact on economic performance. The Shift Index is focused on three sets of main indicators:

* Foundations, which set the stage for major change
* Flows of resources, such as knowledge, which allows businesses to enhance productivity
* Impacts, which help gauge progress at an economy-wide level

Index data points – click through for detail.


This paper resonated with me because it offers a simple model that is understandable, yet when I study the detail in behind, it captures the host of data points that provide the confusion and contradictions.  It deals front and centre with the reality that corporations, including banks, are not exploiting the digital infrastructure that is presented not the new capital, talent and knowledge flows that are present.

In simple terms the model has three waves, with the first two being drivers of change, and the third being the corporate outcomes.  The current situation is, understandably that, the impact wave is lagging the first two waves.  In short companies are failing to react and explout the opportunities offerred by the new digital infrastructure and knowledge flows that are available.  The result is more of what they refer to as toppling – companies failing.  They also note the recession is masking the longer term shift that is really happening.  This document screams – plan for the future, not the recession.


Written by Colin Henderson

June 23, 2009 at 12:29

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