They say there’s safety in numbers, but following the herd can sometimes lead to catastrophe. What can businesses do to avoid falling for the next fad in the digital transformation space?
Fads are a constant theme in business. Just as the consumer world gets hooked on tulip bulbs and yo-yos, hacky sacks and Crocs, corporate execs can be suckers for a popular mania. A buzzword gains momentum. Bored journalists ramp up the idea. Pretty soon the concept gains irresistible momentum, and boards fret they are being left behind.
Charlie Munger, Warren Buffett’s investment partner, is a keen observer of the phenomenon. He once noted: “Some years ago one oil company bought a fertiliser company, and every other major oil company practically ran out and bought a fertiliser company. And there was no more damned reason for all these oil companies to buy fertiliser companies, but they didn’t know exactly what to do, and if Exxon was doing it, it was good enough for Mobil and vice versa.”
