Generational change is notoriously one of the greatest
challenges in management. With the exception of the early years, it is the most
dangerous time for a business. Many successful businesses fail to make the
change and simply fold.
It is difficult enough in traditional businesses where
generational change means just that, a change of control from one generation of
owners and managers to their children, or to people who could be their children.
However, it is even more challenging in information
technology, where a generational change is a change from one technological
generation to the next – which can mean a change every three to five years
rather than the traditional thirty to fifty.
One only has to look back ten years to see how many “new”
technologies have come and gone – and how many big corporate names have come
and gone with them.
Google are aware of this – and are taking steps to prevent
it happening to them.
They are marketing their venture capital fund to invest in
businesses that are developing new technologies as if it was almost a
It is in fact a very shrewd strategy to renew their own
It will give them the inside track on exploiting those new
technologies – and it will enable them to use their current dominance of
internet marketing to promote those technologies against potential competitors.
Doing it right should preserve that dominance for a few more years.
Of course, we humbler entrepreneurs are in no position to
think in such terms, but Google’s strategy has lessons for us too.
First, even if, worst case scenario, the recession turns to
depression and lasts a decade, new technology – or at least carefully selected
new technology – will remain a growth area.
Second, there are few better places to park any surplus cash
one might have than in the right sort of equity investment – not least because
most of the alternatives look very ropey.
Finally, the best time to invest is just before the markets
begin to recover – not now but, so long as the politicians stop interfering, that
could be only months, rather than years, down the line.