Månad: januari 2021

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Ingen spaning, ingen aning

This is a saying that my late father-in-law used to say to me. He was a high ranking Colonel in the Swedish Army. When in war he argued, you need to constantly adapt to what the enemy does to avoid casualties and gain advantages and that’s why scouting is an important part of military activities. Even if it’s hard to do a direct translation, the essence is “if you don’t scout your environment, you don’t have a clue of what’s going on”.

However, you don’t need to be at war to see the value in scouting the environment to be able to adapt. It’s equally important in sales and marketing. If you don’t understand your customer, you can’t evolve your offerings and be relevant. In the tech industry, many start with the technology and work from there to figure out how the tech can attract customers. There is a famous youtube video of Steve Jobs returning to Apple and explaining why that doesn’t work and argues that you have to start with the customer and work backwards from there. Jeff Bezos and Amazon shares the same thinking and practice the “working backward process” which starts with a specific customer need instead of in product features.

This seems very logical and given for most of us but surprisingly few practice it. At TIQQE, we talk to a lot of potential customers every week and the reason we do that is not because we want to convert all of them to buying customers. The main purpose of our outbound sales is to try to understand where the market is, what kind of challenges they’re facing right now and how we can help. We use that intel to develop offerings and capabilities that really address potential customers current challenges. A simple but good sales strategy and it enables us to be as relevant as possible to our target market – today and tomorrow.

Many companies tend to loose focus and interest on the market over time and spend most of their time and focus on internal enhancements and organizational redesigns. That’s a dangerous path which many companies have suffered from during the years. Kodak, Blockbuster and Borders are just a few common examples but the list is growing, even in the Nordics. Once the market has moved beyond your offering, it’s downhill from there and many are left with cutting prices as the only competitive strategy.

It’s even more important to understand the market today as technology is disrupting industry after industry. There’s a quote from Bill Gates saying “we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”. I believe that’s true and that scouting your environment is an important part of understanding the change ahead to be able to adapt in time.

“Ingen spaning, ingen aning” – Ingvar S Klang, former Colonel in the Swedish Army

Publicerat

Digitalization is dead, long live digitalization

Half of the companies on the fortune 500 list have disappeared in the last 20 years. That means 250 multibillion-dollar companies, 12 companies a year, 1 per month for the past 20 years has been replaced. Why? Emerging technologies are the main reason and it is both an opportunity and a threat. An opportunity if you explore it and a threat if you neglect it.

Half of the companies on the Fortune 500 list have disappeared in the last 20 years. Why?

The simple answer to that question is because they haven’t been able to adapt to changing demands and changing markets. For the past 40 years, technology has been the main driver for change and 25 years ago, Internet was introduced to universities. Since then, Internet has enabled completely new business models and digitalized complete supply chains, from manufacturers to end customers. It has disrupted almost every industry and changed the way we communicate and how we consume and ship goods and services on a global level. There is substantial evidence of the impact of the Internet where retail, logistics and entertainment being a few of them.

The problem with emerging technologies is that the effects are slow enough to go under the radar for boards and management teams for a long time and once changes are visible, it’s often too late to respond. Changing large organizations is a time-consuming process, especially if it includes changing the very way of how they do business. Another problem is that new technology starts in the tech community and is hard for non-technical people to encode and translate into business impact. The decision power in an organization are board and management teams who often do not have deep technical insights.

Furthermore, emerging technologies often get a conceptual name, which then becomes a buzz word such as “ebusiness” in the late 90’s and “on-demand” in the beginning of the century. The buzz word today is “digitalization”. You get 15.5 million hits on google if you make a search for digitalization. There are thousands of interpretations of what it is and what you should do making it really hard to translate it into your own context. These concepts usually get warned out before the new technology has even made an impact, further complicating the process of spotting and translating new technology for a board or a management team.

I read an interesting article by William Bergh, who practiced as CEO for one month at Adecco. The article is a reflection of his time as CEO during the Covid-19 outbreak and how to manage a company in the midst of a crisis. He argues that the characteristics of a crisis is the element of surprise, the lack of information, the need for speed and the opportunity to change. The element of surprise is central because it arises no matter the speed of the cause. Some might argue that surprises are sudden by nature but that is not the case according to William Bergh. He mentions Covid-19 as a good example. Many were aware of Covid-19 for months before it hit but its impact surprised all of us. The same goes for mega trends. We know that automation, AI and machine learning will change our world profoundly, but we will nevertheless be surprised about how they will impact us.

Trust me, digitalization or whatever we call the new emerging technologies, is just in the beginning. It will continue to disrupt industries and companies making even more remarkable changes in the Fortune 500 list in the future. This is both an opportunity and a threat for every company across the globe. It’s an opportunity if you start exploring how new technology can enhance and develop your business but a threat if you neglect it and just hope for the best. One thing is sure, there will be changes in every industry and if you don’t reinvent yourself, someone else will do it for you.

So, what is our advice?

We offer you 3 pieces of advice.

Start with the customers

You need to start with the customer interface and work backwards from there. How can you improve the customer experience with new technology? How can you leverage your data to build new digital products or solutions for the benefit of your customers? Don’t wait until your customers are asking for something you can’t provide because then it will be too late. Align with someone who understands both sides of the fence; customer innovation and modern technology.

Enable your digital capabilities

Your digital capabilities will not be enabled in your legacy infrastructure. You need to establish an agile and scalable business infrastructure on top of your legacy infrastructure to enable digital products and services.

Start small

Our final advice is to start small and prove the value. Identify one thing that would provide your customer with some form of new value. Build that service all the way from the customer to the backend systems and establish your new business infrastructure as you go. Do not fall in the trap of big architectural plans and designs as it will never be completed.

If you wish to read William Bergh’s interesting article of managing a company in crisis you can find it here. He is 25 years old by the way and the analysis is razor sharp.