Before the days of the internet, ‘technology’ companies focused on building computers, servers, and software - how things have changed. Today it is impossible for a company to make, market, or market its product without relying on some form of technology.
In fact, I was at the local farmer’s market and many of the vendors were relying on chat apps, payment apps, and other tools to help manage their businesses. As such, I can say that every company is a technology company.
Think about it technology brought you to this article. But enough with the hyperbole; let’s look at how we got to this point, what it means for your business, and what you can do about it.
Looking Forward by Looking Back
This might seem counter-intuitive for an article about technology, but to understand how we got here, we need to look at the big picture. I am not talking about going back to the invention of the steam engine. Instead, let’s start with the dawn of the commercial internet in the mid-90’s.
Since then we have experienced three waves of technological disruption and I would argue a fourth wave is on the horizon. The first wave changed music, books, travel, and shopping forever. So much that the course of these industries has been irrevocably altered.
This disruption set the stage for the second wave which included advancements such as social networking, mass adoption of smartphones (remember the Blackberry?), and importantly we saw connected software suites making their way into business.
Fast forward to today and the waves have grown both in terms of frequency and amplitude. The result is that technology has become an enabler for change in almost every industry. Just think of the plethora of digital tools which have become an integral part of doing business – cloud, analytics, the sharing economy, digital wallets, machine learning, blockchain, IoT, and virtual reality. These tools are transforming the way we work. For example, at 375 Park we have integrated our proprietary growth algorithm with artificial intelligence to deliver insights for clients.
Looking around the bend, I have little doubt that the disruption will continue to gain pace. In fact, many of the emerging trends are already available. These include renewable energy, batteries, robotics, machine-to-machine payments, autonomous vehicles, drone farming, autonomous manufacturing, and 5G.
Transforming Business Models
The result of these advancements has been the disruption of business models in most industries. The disruptions in travel and entertainment happened first because these industries were most susceptible. But the march of the machine continues, so much so that it is starting to reverse the last great industrial disruption – offshoring.
Twenty years the rush to shift manufacturing to low-cost regions cut across nearly every industry. However, technology is reversing this trend and more companies are looking at ways to shorten their supply chains to reduce cost while increasing quality and time to market. The current trend of reshoring work hasn’t necessarily lead to more jobs as two trends – 3D printing and robotics – have replaced the need to for workers in some positions.
One example of a company which is taking advantage of this trend is Formlabs. The company has developed the best-selling stereolithographic 3D (SLA 3D) printing device on the market today.
While 3D printing has tremendous room for growth, another advancement in manufacturing is robotics. Granted, the utilization of robots in manufacturing is not a new development. What has changed is that today’s machines are easily reprogrammable and multifunctional – so much so that it calls into question of the theses of Womack’s The Machine That Changed the World.
The book offered a detailed insight into the Toyota Production System – also known as ‘Lean Manufacturing’. Per Womack, the people-centric systems of Toyota were more flexible than the initial forays into robotics by American and European car makers in the 1980’s. While there is some truth in the premise, today’s robots are agile, connected, and cost effective – and this is changing the very nature of manufacturing.
The disruption does not end at the factory loading dock. In fact, a multitude of professional service industries are undergoing rapid transformation due to increased adoption of technology. Be it banking and financial services where implementation of robo-advisors, artificial intelligence (AI), and blockchain are transforming the industry. Or the impact of AI and smart contracts are having on the practice of law and medicine.
In many ways, what is happening to healthcare is a perfect example of how every company is a technology company. And developments such as gene mapping, sensors, IBM’s Watson Cancer research, and electronic health records give us a glimpse of what the future of healthcare will look like.
What does this mean for businesses large and small? The first point is not to fear the change. Instead, embrace it by looking for new applications for many of the tools that are emerging on the market today. This will lead to new business models which in turn will transform value chains.
This approach will give small and mid-market companies an advantage over their larger competitors. It might be speed to market, connecting with customers, or some combination thereof – either way, it’s important for companies in every industry to start thinking of themselves as tech companies.
How to Make Technology Work for Your Company
Technology has lowered the barriers to entry in just about every industry and this has led to the rise of ‘plug and play’ value chains – which creates openings for organizations who can quickly react to customer need.
However, leveraging tech to transform your company doesn’t start by looking at what your competitors are doing. Even though you want to be cognizant of what the competition is up to, you want to guard against falling into the ‘me too’ trap of technology adoption.
Instead, you want to utilize technology to connect with your customers - though you will have to decide to what extent to lead and/or follow - and then into strengthening your value chain.
As such, you want to look at ways to utilize technology to:
- Reducing friction in your value chain;
- Improving the decision-making process;
- Enabling business models which enhance the customer experience to emerge.
In the end, it is important to remember that transforming your company into a technology company is a bit of a moving target. As such, you want to learn how to embrace, and learn from, the journey. In doing so, you and your team will find that you have transformed the leadership of your company into an organization which leverages disruption to drive growth.