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How is today’s business like professional bicycle racing?

I am sitting in the dentist’s chair the other day and my dentist says to me, “It seems like the pace of business has become ridiculously fast ever since the prominence of the Internet.”  For some reason my dentist thinks of me as an oracle of some sort – perhaps due to my deep technical know-how combined with the ability to carry on a normal conversation without the use of acronyms.  Given this perception or boredom on his part, his made this statement with the obvious anticipation that I may provide some clarity on this.  Luckily, I am free of pain that in turn, obligates me to come up with some response so as to not shatter his obviously ridiculous notion that I know anything about anything.  Quickly, I try to think of a metaphor that will help explain my position that today’s marketplace is indeed moving forward at an ever increasing pace yet the pace of change remains fairly constant over time.  (I do believe there is a shift taking place but that will be discussed at the conclusion of this article.)  So it dawns on me that business moves forward in a surprisingly similar manner than that of professional bike racing.  So with the Tour-de-France going on, the analogy goes something like this.

I know just a few things about professional bike racing but not that much so please forgive my neophyte prospective.  In professional bicycle racing, the object of the sport is to be the first person to win the race.  Pretty profound, yes?  The races tend to be very long and typically involve a great number of riders.  Apparently there is a lot of strategy that takes place so that groups of riders can propel one or more of their own team to victory.  I know a bit about physics so I suspect that the teams are trying to overcome such things as wind drag, differences among the various riders abilities and boredom in the fact that these races last up to 5 hours!

It is safe to say that the rate by which riders are able to complete races of equal distance and topology has shortened over time.  This “forward progress” can be attributed to advances in technology, information and conditioning.  The same holds true for the advancement in business in general…. and if that is all I had to offer, then this would be a pretty worthless piece wouldn’t it? So….

Within a given race, the riders generally move in what is known as the “pelaton”.  I have no idea what this French word actually means but to me it means pack.  So the pack rambles along through some nice European countryside without a care in the world safe with the notion that the “pack” will all receive the same finish time as long as they arrive in one cohesive unit while crossing the finish.  You heard correctly, this leading group can ride fast or slow as long as they all finish at once; everyone receiving the same time for the race

This concept is not without danger because if the pace is too slow, the probability that a “breakaway” will occur increases.  A breakaway is when one or more riders, probably fed up with the pack for whatever reason, feel they can go their own way.  Perhaps they are feeling strong that day or just believe that they can stick it to those slow pokes and beat them to the finish.

The one or more riders in the aforementioned breakaway – no matter how many or few –all have to deal with a big problem, wind drag.  The more cyclists riding together, the more people there are to break the wind.  The more the wind is broken, the faster the pace or the less energy is expended in doing so.  The breakaway must therefore work as a team taking turns breaking wind in order to keep up the pace and squash those silly weaklings who have remained within the pack.  The more they work together the higher their probability of success.

Meanwhile back at the pack, news travels fast that a breakaway has occurred.  The pace quickens as does concern.  Updates are reported back to the group of riders on the progress of the breakaway.  Are they gaining ground?  Losing ground?  What do we do now?  Do we speed up significantly as a group expending precious energy or do we assume that the breakaway will loose steam breaking the wind and eventually fade into our mighty pack?

If the progress of the pack against the breakaway isn’t satisfactory to another group of riders, a chase group composed of some them might form.  This is a group of riders that are unconvinced that the breakaway will fade only to be enveloped by the pack.  They may or not be “friends” or on the same team but they are united by the desire to win the race, stick it to the slow pokes or simply not let themselves be embarrassed by the bastards in the breakaway.  So the chase group sets out to catch the breakaway.

Meanwhile back in the pack, things are really getting desperate.  Pace picks up yet again.  Information flow increases to a feverish pace.  There is a limit to the pace of the pack since there isn’t a lot of space to maneuver given so many people in such a small area.  Furthermore, it is difficult to get everyone to move in a new way since the current methodology has so much mass.

There are no rules for or against any of this kind of stuff; breakaways, chase groups and even packs can jockey all they want.  In the end, the first person across the finish line wins – provided it’s not the pack of course in which everyone wins but this rarely if ever happens.  The winner receives a new shirt, is kissed by two pretty girls (or hunky guys in the case of the female version of the sport), takes a champagne shower and collects a check.

So here is the kicker….

Business works similarly in that many industries just lumber along at their own pace, happy to have their own little piece if the pie.  No one seems to want to upset the apple cart by moving too fast or innovating too much.  Everyone is safe in the assumption that they can all cross the finish line together.  Inevitably some new technology or uppity company comes along and jumps out in front; CLECs for the telecomm industry, the Internet for Bill Gates, desktop computers for IBM, Amazon for retailers, etc..  The “pack” pays little attention to the upstart at first figuring they will burn themselves out at their pace or that is just a fad.  Companies think “That breakaway will never break enough wind” without more help, and we are not going to help them!

Meanwhile back in the pack, the pace picks up just a little bit hoping that perhaps the whole group can catch the breakaway and bring the market back into the fold.  They innovate just a little more now while paying close attention to what is going on “in front.”  There isn’t much room to maneuver in the pack because shareholders can be very demanding.

Statistically, the pack ends up enveloping most if not all the “breakaways” while at the same time gradually picking up its own pace.  Every once in a while a new brand or a new industry manages to go out in front and finish in that spot; Amazon and Yahoo! are great Internet examples.  Furthermore, chase groups sometimes leave the pack and catch up to the breakaways – to perhaps be bought – and manage to finish in front.  The bottom line is the majority finish with the pack.

Conclusion

The “new economy” as it was coined in so many business-oriented publications isn’t new.  Innovations in technology and strategy continue to accelerate as they always have so the rules haven’t changed; if you make money, you are rewarded, lose money and you get slaughtered.  What is different is the proliferation of enabling technologies – such as internetworking – have significantly reduced the “wind drag” on business such that breakaways can occur more frequently, they can jump ahead astonishingly fast and they seem to be able to finish quickly leaving the pack behind.  Then again, if you look at the recent failures of dot-com’s, perhaps traditional business are not really left behind and that the breakaways just could not break enough wind.