Cornelius Vanderbilt’s success as an entrepreneur is legendary, but our interest in him should be more than historic. Vanderbilt’s approach to long term strategy during a period of rapid technological change represents a free “How To” guide for business leaders in today’s Age of Digital Disruption. Taking a page from Vanderbilt’s book can help us sift through the dizzying array of technology choices and challenges, helping us to focus on what really matters in any enterprise – the mission.
Master the mission and you master the market.
The Steam Age
The mission for Vanderbilt was transporting people and goods from point A to point B and through his life he proved the master at doing just that – better, faster, and cheaper than his competitors. He embarked on that mission as a boy – working on his father’s sail boats ferrying passengers and cargo from Staten Island to Manhattan.
Accounts vary about whether he bought his own boat at sixteen or bought into one of his father’s boats. Either way, he was in the transportation business while still in his teens, known for his reliability in getting the ferrying job done regardless of the weather conditions. This led to two things: 1) his nickname of “The Commodore;” and 2) an offer to pilot one of the first steamboat ferries across the Hudson. He captained for Thomas Gibbons whose steamboat ferry service from New Jersey to New York was fighting a state monopoly granted to the eminent Robert Livingston and the steamboat designer Robert Fulton. The underdog Gibbons/Vanderbilt team played the long game, eventually beating the monopoly through a combination of efficient operations, lower prices and a winning case on interstate commerce before the Supreme Court. Under Gibbons, the Commodore mastered more than steamships. He learned how to lead a complex enterprise, but not just any enterprise – one that was dedicated to the mission of transportation.
Vanderbilt was still pursuing and perfecting that same mission decades later assembling the nation’s first railroad networks, connecting the country. Along the way he was an early adopter of breakthrough technologies every step of the way – from clipper ships to steam ships to steam locomotives – but he never lost sight of the technology’s purpose – serving the transportation mission. This clarity enabled sustained business agility. Instead of viewing ocean going steamships as a competitive threat to his sailing fleet it was clear to Vanderbilt they were an exciting new way to get the same job done much faster. In that same way railway service from the New York suburbs into Manhattan was not a threat to but rather an extension of the business model he had had mastered ferrying people across the Hudson as a young man. This constancy of purpose as Deming called it was key to Vanderbilt’s remarkable success, capitalizing on each revolution in technology that transformed transportation during the first half of the nineteenth century. In doing so he created what was at the time the largest business empire and the greatest fortune in the young United States.
Leaping from sail, to steam to rail he always looked forward, never back. Vanderbilt didn’t survive the disruptive waves, he surfed them.
The Digital Age
We live in a crazy, cool time – the Age of Digital Business – every bit as revolutionary as the Age of Steam in which Cornelius Vanderbilt lived. The Internet, Automation, Mobility, Big Data, Analytics, the Internet of Things, Blockchain, Artificial Intelligence, Robotics, Autonomous Vehicles – all of these are radically transforming our world: the way work is done; the way business is transacted; how we interact with machines and with each other. Everything about the game we call business seems to be changing all the time.
But perhaps the key to winning is focusing on what is constant. Technology changes the plays we can call, even the field on which we play, but a winning leader knows how to make those changes work over the long term in service of the enterprise’s central mission, extending its reach, transforming its capability, enhancing its value.
Vanderbilt on Digital Disruption
The lessons from Vanderbilt’s Steam Age success hold true in today’s Digital Age:
- Master the mission and you master the market.
- Leverage new tech to reinvent what you do best.
- Don’t be disrupted, be the disrupter.
Heeding these lessons requires:
- Strategic clarity – understanding your core competencies, business processes and customer’s needs in a way that is technology agnostic
- Strategic agility – adapting rapidly to new technologies and business models that enable those competencies and deliver new value to customers
- Constancy of Purpose – holding to the mission, even as the mission platforms change
How to apply these lessons to your business? Look to new technologies to open up possibilities to better serve customer needs, while sticking to the fundamentals.
If you are in Healthcare what are the implications of new technologies for better connecting patients with services across payer/provider networks? In Entertainment what are opportunities for connecting viewers with better content, anytime, anywhere? In Retail what are new ways to connect consumers with goods they want when and how they want to acquire and pay for them. In Telecoms and Computing how is technology transforming our ability to access, leverage and communicate information?
If like the Commodore you are in the Transportation business what are new possibilities for getting people from point A to point B by car with or without a driver, by ship, by plane – or by Hyperloop.
Vanderbilt would be way into Hyperloop were he alive today.