Are you disrupted or disrupting? The answer depends on whether you are proactive or reactive.
If you’re a transportation company but not Lyft or Uber; if you’re a lodging company but not Airbnb; if you’re in media content creation, publishing or distribution but you’re not Netflix or Amazon, you’re probably feeling disrupted.
If you’ve recognized that technology is a fundamental component of corporate strategy involving the full C-suite and the board, you’re likely positioned to disrupt your industry competition.
Disruptive leaders go beyond leveraging technology for tactical cost reduction through efficiency and process improvement. Instead, they take a more strategic stance — reallocating scarce resources to higher-growth activities. When savings are realized, leaders don’t simply report them; they invest in strategic market applications.
“Leaders are taking a proactive approach,” said Steve Perkins
, Grant Thornton’s Technology Industry Practice national managing director, during Grant Thornton’s recent webcast, The Future of Growth and Industries: Trends to Watch for 2020.
“Success favors early movers, a winner-take-all model. There’s significant risk to not moving on the opportunity.”
The opportunity, Perkins stated, is to disrupt both your industry and other industries. Early on, technology companies had the upper hand. A reversal is underway, Perkins said. It’s becoming anyone’s game: “One example is in analytics. As an architectural transformation, it’s here and accelerating. There’s a confluence of factors coming together that will drive disruption from industries that create the data.”
A disruptor manages data’s volume and pace
Transformations are giving every organization the chance to take the driver’s seat. Low-cost computing, Microsoft Cloud, Amazon Web and other services with scalable technology on demand came at the right time. Even traditional organizations are applying artificial intelligence techniques to machine and cognitive learning. In coupling these tools with the internet of things — which favors any organization that owns the network, customers and product sets — an organization can be a digital disruptor that takes advantage of market opportunities.
Technology’s original benefits of efficiency and effectiveness have not lost their value. Indeed, the new architectures present opportunities to drive these benefits. “Our research [The future of growth and the technology industry: Reinventing the “new,” again
] shows that leaders plan to automate processes and improve process efficiency over the next three years,” said Perkins. “Digitization should happen at every step of the business value chain — sales, marketing, distribution, products, digital services, supply chain, manufacturing, finance and HR.”
Technology is reshaping risk-taking
Technology risk used to be all about cybersecurity; the focus now is on managing corporate performance and results.
The most effective risk management is undertaken in a spirit of exploration rather than fear. For an analogy, Grant Thornton’s Risk Advisory Services National Managing Principal Vishal Chawla
points out that the focus in race car performance is not acceleration — it’s the brakes. This may seem a defensive tactic, but, Chawla said, “It’s not about slowing down. It’s about control.” A win comes from a great driver and great brakes. Similarly, your best business bet is not avoiding risk but weighing and controlling it, and aligning risk strategy with business strategy.
One critical business risk to control is securing a talented workforce. A shortfall of 2.4 million STEM workers is projected for 2018 — some of it driven by populism or fear of populist zeal. This will be a paralyzing issue for any organization that has not foreseen the risk, considered the impact and seized the opportunity to escalate hiring initiatives.
Examining risk looks forward, Chawla explained. This isn’t well-understood; many risk functions are focused on compliance, which looks back. Optimize your risk management program by taking it out of reaction or avoidance mode and positioning it to be performance-driven. Define an organizational risk profile and foster a risk-taking culture, creating a risk posture that produces operational results.
Balance is the byword. A balanced strategy brings together business, digital and risk components for unified decision-making. The result is a stronger, more flexible organization that positions itself as a technology disruptor and — more importantly — a marketplace winner.
Anticipating culture shiftsCitibank got into the ATM business in the 1970s despite the naysayers who declared that people wanted to interact only with tellers. But banks were faced with the issue of teller line congestion and the increased costs of adding employees and constructing new branches. And then culture shifted to more work and personal activities into the evening, well past bank closing time. Citibank’s decision presaged a world in which transactions of many kinds would be undertaken far from a bank and banking hours. By 1991, Citibank had doubled deposits in the state of New York., earning its tag line, “The Citi Never Sleeps.”
“Ultimately,” reported Smithsonian.com, “the ATM was part of a revolution in how banking was seen and saw itself. This shift had to do with what kind of business bankers thought they were in — turns out, it was information processing, not money moving.”
Visit “Reigniting Business Growth” to read the Technology report; for more on how disruption is recasting entire industries, see Across the economy, the technology industry is smashing business models — including its own.
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Risk Advisory Services
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