Over the past couple of years there have been a number of reality television shows based on the art of survival. To be honest, most of us will never find ourselves in the situations depicted on those shows and we won’t need the skills that survivalists possess in order to safely navigate most of life’s challenges. The same can’t be said about the business world. Every business finds itself in a threatening and constantly changing environment in which a number of skills are essential for survival. Among those skills, insists Daniel Nolan (@daniel_nolan), Founder/Chief Idea Guy/Principal Consultant at Denovo, are skills that foster innovation. “Innovation becomes a critical survival skill,” he writes, “when looking at predictions for how we will live, work, and communicate [in the future].”[1] Although Nolan doesn’t detail all of the skills necessary to overcome the challenges of the future, he does indicate that taking the long view is among them. He explains:
“Successful innovation involves a level of prediction. Successful businesses not only respond to their current customer or organizational needs, but also anticipate future trends and develop an idea, product, service, process or tools that allows them to meet future demand rapidly and effectively. Being aware of opportunities that exist now, or that are likely to emerge in the future can assist in focusing an innovation program.”
Nolan then discusses six areas of interest about which every company should seriously do some “what if” thinking. Those areas are: Competition; globalization; consumer expectations; new technologies; changes in the workforce; and changes in how we will work. In the years ahead, changes in one or more of those areas is going to affect every business.
Competition
The very nature of competition is changing. Nolan writes, “Competition is a typical reason for encouraging innovation in business. Predictions for competition in the future come from the pressure of new and existing competitors, as well as the changing market due to globalization. Competitors are getting smarter, faster, and hitting the market with new and exciting products more rapidly. Innovation cycles are becoming shorter. New products and services are being released at ever increasing speeds. This is placing additional burdens on existing organizations to keep up, either by matching product features or attempting to leap frog over competitors.” Jessica Twentyman (@jtwentyman) goes so far as to assert that traditional business models need to be overturned. “Organizations have little choice but to overthrow their traditional business models,” she writes, “as digital technologies sweep through their industry.”[2] Twentyman reports, “Dr. James McQuivey has three statements and a question for CIOs across all industries.” The three statements are: “Digital disruptors are rewriting the rules of business. The barriers-to-entry for many established markets have all but vanished. And unexpected competitors are swarming in.” McQuivey’s question is one every company must ask, “So, what is your business doing about it?”
Globalization
Nolan insists, “To thrive in tomorrow’s rapidly changing and global environment, companies have no option but to launch innovation programs to attract new customers, and open new markets. The changing world market is an opportunity for those who innovate and take advantage of it.” That is certainly easier said than done. Where are you going to open new markets? The BRIC (Brazil, Russia, India, and China) economies are either stagnant or struggling and frontier markets remain scary places in which to do business. Philip Stephens (@philipstephens) notes, “The founding assumption of the post cold war settlement was that global economic integration would drive closer political cohesion. In today’s post, post cold war order, economic and political nationalism are marching together in the opposite direction.”[3] Any company taking the long view of globalization’s future must consider how it will respond to both good and bad scenarios. It won’t be as easy to “follow the money” as was in year’s past.
Consumer Expectations
As I noted in another article, “Today the consumer is king and the royal road is the digital path to purchase.”[4] Nolan writes, “With social media and the continuing advancement of technology, marketing will become increasingly personalized for each customer. This will require new ways to market, advertise products and services, as well as gain and retain customers. The modern consumer is more informed and, thanks to globalization, has more options available to them. Consumer expectation is also high and will continue to be so. They will not accept mediocre or obsolete products or services. They don’t have to. They have options. Consumers are looking for products that will improve their lives. They want companies to solve their problems and to make their lives easier. As a result, customer expectations are and will continue to drive innovation.” Allan Alter (@allanealter), a senior research fellow at the Accenture Institute for High Performance, agrees with Nolan that customers are looking for companies that can solve their problems. He told Mary K. Pratt (@PrattWrites) that retailers should be thinking about selling consumers outcomes rather than products and/or services.[5] His remarks are reminiscent of those offered by Harvard Business School marketing professor Theodore Levitt, who famously stated, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”
New Technologies
Nolan notes, “Technology driven innovation is becoming the norm.” The editorial staff at Material Handling & Logistics (MH&L) lists ten advanced technologies it believes will shape the future of manufacturing.[6] They are:
1. Predictive analytics
2. Smart, connected products (Internet-of-Things)
3. Advanced materials
4. Smart factories (Internet-of-Things)
5. Digital design, simulation and integration
6. High performance computing
7. Advanced robotics
8. 3D printing and scanning
9. Open-source design / direct customer input
10. Augmented reality
Nolan concludes, “Using new technologies in a new way and developing new technologies through innovation will be essential to meet the challenge due to the change in technology. Fight technology with technology. If a company is not using technology to the fullest and its competitors are, the organization’s lifespan may be limited. In addition, preparation is needed for technology that cannot even be imagined yet, as well as a strategy to leverage it to an advantage. Or better yet, go invent the new bigger, better mousetrap and lead the new wave of technology.”
Changes in the Workforce
Millennials (i.e., members of Generation Y) now constitute the largest segment of the workforce. Numerous articles have discussed how Millennials are changing the workforce. Age is not the only demographic changing the workforce. Nolan writes, “A more diverse workforce is upon us. The diversity of race, ethnicity, age, nationality and gender in the West will continue. The challenge of recruiting and engaging these various groups are large but the payoffs will be significant for those employers who figure out how to do it. Companies who can attract, engage, and maintain diversity can leverage their workforce for a broader exchange of ideas and knowledge.”
Changes in Work Itself
Nolan notes that how we are working is changing even more dramatically than how the makeup of the workforce is changing. “The workforce is becoming more social and more mobile,” he writes. What he doesn’t write about, may be even more important — automation. “Emerging technologies like industrial robots, artificial intelligence, and machine learning are advancing at a rapid pace,” observe Brookings Institution analysts Jack Karsten (@jtkarsten) and Darrell M. West (@DarrWest), “but there has been little attention to their impact on employment and public policy.”[7] Companies are not only going to have to decide how automation is going to change the workplace but how those decisions could affect the wider economy. “While emerging technologies can improve the speed, quality, and cost of available goods and services,” Karsten and West write, “they may also displace large numbers of workers.” We know that high unemployment is never a good thing; yet, businesses seem determined to follow a path that will inevitably result in that outcome. Jobs sustainability is something that we need to think about and mitigate starting today.
Summary
Nolan concludes, “To be successful in this increasingly competitive and fast changing business environment, … companies will need to outperform others at business strategy, product and service development, talent attraction and retention, flexible and efficient operations, and effective use of technology. Every organization has its own priorities, goals, and issues to balance. Innovative approaches to tomorrow’s challenges are a differentiator between those companies that lead and those who chase. Innovation is quickly becoming a survival skill.” Implementing a process that fosters continual assessment of the future (i.e., taking the long view) will help companies survive in an ever-changing world.
Footnotes
[1] Daniel Nolan, “6 Reasons Innovation is a Survival Skill,” Innovation Excellence, 5 January 2016.
[2] Jessica Twentyman, “The digital imperative: disrupt or be disrupted,” I – Global Intelligence for the CIO, October 2013.
[3] Philip Stephens, “‘Fragmentation’ and ‘identity’ are reshaping the world,” Financial Times, 18 December 2014.
[4] Stephen DeAngelis, “Mastering the Digital Path to Purchase Remains Challenging,” Enterra Insights, 6 January 2016.
[5] Mary K. Pratt, “The outcome economy is upon us — is your business ready?”SearchCIO, August 2015.
[6] “10 Advanced Technologies That will Shape Manufacturing’s Future,” Material Handling & Logistics (MH&L), 20 November 2015
[7] Jack Karsten and Darrell M. West, “How robots, artificial intelligence, and machine learning will affect employment and public policy,” The Brookings Institution, 26 October 2015.
