Autotech, fintech, and healthtech. These aren't just buzzwords. They epitomize the enormous increase in technology's role and value. Technology is no longer a side discussion, but an integral part of a company's strategy.
Innovations in cloud, mobile technologies, data and analytics, and social networking are fueling companies and disrupting markets. We're witnessing this massive change up close in the Bay Area, where tech innovation has extended beyond Silicon Valley into San Francisco and surrounding communities.
We can even add "fashiontech" to our vocabulary to reflect the latest industry to undergo rapid, disruptive change. Fashiontech startups such as Polyvore and Poshmark have attracted millions of dollars from investors. Tory Burch and Fitbit are collaborating on a collection of accessories combining fashion, fitness and technology.
But technology is just one element driving significant changes in businesses today. Companies across all industries face not only disruptive technologies but shifting customer demands, globalization, and new regulations as well. The three factors have combined to create a "perfect storm" where both opportunities and threats abound.
Remember when Google was an "internet" company? It still is widely known for its search engine, and its analytics, though today it also has developed self-driving cars, glucose-sensing contact lenses, a digital wallet, and connected eye glasses.
Your collaborators and competitors today may switch places tomorrow, or you may be surprised by a new competitor. Technology innovation, home-grown or acquired, has lowered the barriers to market entry in many industries. There are many examples of online businesses out-maneuvering established "brick and mortar"-based retailers. Now, established online businesses can find themselves blindsided by new online entrants leveraging cloud-based operations to launch faster globally with lower cost operations.
Many companies see the need for a transformation of their business in order to take advantage of this storm. To this point, 93 percent of U.S. companies surveyed last year by my firm said their company was in some stage of changing its business model. Transformation is all about businesses making comprehensive changes when small shifts are not enough to sustain growth.
Leaders should review the following questions when considering transformation:
•What will the industry landscape look like in five years with opportunities for mergers and acquisitions, and the wider adoption of disruptive technologies?
•Who are the competitors today, and who will be the competitors in the years ahead?
•How will customer needs change in the future as they require greater and faster access to relevant data and services?
•How will the company organize and manage its operations in a highly cost and service competitive environment of constant change and increasing risk, tax and regulatory complexities?
•What will focus and motivate the organizations people to support and drive the strategies of the company in such a complex and dynamic environment?
In the current business climate, organizations often underestimate the significance of the operating model changes across markets, products, processes, technology and people. A formal transformation process is crucial to a successful enterprise-wide transformation. Companies that align all their people on their vision, strategy and goals will be in best position to quite possibly become the companies that spark the next new business term and hot segment.