For a business to succeed, it is important to quickly adopt new technologies
Summary
According to a report by consultation company PwC, there are many things keeping corporate management awake at night. The rapid pace of technological advances is one of the main concerns for management. Of particular interest is that while many established businesses are aware of […]
According to a report by consultation company PwC, there are many things keeping corporate management awake at night. The rapid pace of technological advances is one of the main concerns for management. Of particular interest is that while many established businesses are aware of the threat of digital disruption posed by fast advancing technologies, corporate management feels that their companies are not sufficiently prepared to face the challenges of digital disruption.
Professors Jeffrey Pfeffer and Robert I. Sutton from Stanford University refer to this situation as The Knowing-Doing Gap. According to them, the gap does not stem from incompetent leadership, but rather the inability to move from acknowledging an issue to taking action on it.
How can businesses prepare for digital disruption better?
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Don’t hold on to old systems
The pace of business environment changes is increasing, so it becomes more important to be able to adopt new technologies quickly in order for your company’s competitive advantage. Although the benefits of new technologies are obvious, adjusting to them can be difficult. Legacy systems are responsible for slowing down the pace of change in established businesses. Legacy systems have a long estimated useful life, which often leads to a misleading picture about a company’s true competitive sustainability.
Another factor that can influence businesses is the perception that technological innovation will only bring a marginal competitive advantage compared to the amount of investment required. Technology can bring a disadvantage to a business that is not up-to-date. Instead of providing a competitive advantage, new technologies will ensure the continuation of business activities.
Adopting new technologies isn’t about creating a competitive advantage, but about survival. Digital disruption is threatening every industry and its supply chain. It’s up to you to be brave and invest in new technologies.
Give your business a fighting chance for the future
Consider the value that a business seeks to create for customers in order to assess the impact of digital changes on business activities. According to the well-known value discipline model by Treacy and Wiersema, businesses have traditionally strived to achieve a competitive edge by excelling in one of the three value disciplines:
- Product leadership is achieving a competitive advantage with the best features of a product (e.g. Apple, Google
- Operational excellence and lower costs than the competition (e.g. Walmart, Lidl)
- Customer intimacy, superior customer experience (e.g. Stockmann, Nordstrom)
However, organisational theorist and author of the book Crossing the Chasm (1991), Geoffey A. Moore points out that in the world of digital change, businesses such as Amazon or Google are able to beat their competition simultaneously in several disciplines. These companies can use various algorithms to improve their supply chain efficiency (operational excellence), and provide their customers with top-quality experiences (customer intimacy).
Companies that aren’t digitally proficient today could be even worse off tomorrow than their competitors in the three areas. Businesses that are willing to make changes in the right time have a better chance of beating their competitors in the future.