By 20 February 2017 | Categories: Misc



By Thomas Oosthuizen, Global consulting director, London at Acceleration

There has been a seismic shift in the global political landscape. From Donald Trump in the US and his challenges, to globalisation, to Brexit and its implications for the EU, to growth challenges in emerging markets, to socio-political instability and the rise of radical terrorism in many regions of the world.

In business, the number of variables executives need to contend with has exponentially increased. This is not only because of the above issues, although they complicate executives’ responses. Core to this is the extent to which technology has changed markets and how that very change is accelerated by technology itself.

Technologies like Blockchain and industrial digitisation are having a far more dramatic impact upon business than even consumer technologies. In many industries, the application of digital technologies to manufacturing and logistics processes is already dramatic.

Technology is capable of creating disruptive brands like Uber overnight, and it is also the vehicle that gets them globally adopted at lightning speed.

Technology knows few resource boundaries. In any industry, many potential disrupters are at work at any given point in time. Two people in a garage can completely disrupt a market, adding immense pressure to businesses already contending with low market growth and decreasing margins. It is simply not fair.

Hence it is no longer whether a company will be disrupted; it is only about when and how. This can happen in almost all areas of business, from the products that companies manufacture, to how they market, to how they run their operations, to how they respond to customer complaints. 

It is fair to say that technology does – and will – impact every aspect of business. The key question for companies is how best to use it to maximise competitiveness and profit margins.

The complexity of technological change poses a challenge for most companies to not get lost in the headlights, but to define where the most serious competitive advantage lies and how best to leverage that.

Companies need to know which technologies offer the best opportunities. They need to overlay that onto their current organisations and assess where the most dramatic opportunities lie and what changes are required to enable them.

Two key impacts of technology change

  • Technology has put business agility center stage.
  • Informed consumers also don’t help; just as we think everything is ok, we are caught out. Transparency in all aspects of business is not something most companies are used to. They don’t deliberately lie; it’s simply that supply chains, manufacturing processes, suppliers, marketing campaigns and consumer exposure to digital media have become omnipresent.

Informed consumers hold enormous power. One tweet can change the fortunes of a company.

Consumers want brands to know and serve them better, but they also do not want their privacy to be disturbed. We like to use Google Maps, but get uncomfortable about Google knowing exactly where we are. We want to receive that great offer, but don’t want to give away too much personal information. Companies need to live with these contradictions.

Companies have spent a lifetime or five creating frameworks, protocols, processes and structures that can deal with and manage uncertainty. These very protocols are literally no longer required. Even business holy cows, like performance management, are being questioned and discarded.

In traditional companies many years of hard work created competitive advantage, mostly at very high levels of investment. Even lethargic companies became successful while markets were growing and the pace of change was slow. Products took years of research and development to get to the market. The inevitable trend was that large companies grew by industry consolidation, right-sizing and benchmarking.

We are in for an era of “deep” change within companies. Whether in politics or business, this is an uncertain time.

Yet, the era of “easy” strategic decisions like globalisation, benchmarking, brand rationalisation and industry consolidation is over. In most of these instances, companies simply followed the lead set by competitors. These changes may have been disruptive and dramatic, but they were hardly complex. They followed a template set by others with low levels of strategic variability. If you followed the herd, you generally benchmarked or globalised more or less like everyone else. Prof Gary Hamel, with good humour, states that often consultants “infected” all corporates with the same “germs” – once a template was established, they simply replicated it everywhere. Sadly, that is actually true.

The changes that digital technology are forcing are far more dramatic, diverse and complex. This requires far greater insight, intellectual rigour and higher levels of risk. It entails more strategic options and generally far more complex change. There is no simple template that will work for all companies. Like digital disrupters turn traditional industries upside down, the ways in which technology is leveraged to transform companies, are endless. The fact that we are made aware of them, every day, through trends, news, brands and viewpoints, means the average CEO has nowhere to hide. The change is as dramatic as the omnipresence of it.

In the past, learning best practice was a sure-fire way to do well in the future. That era is also over. In Part 2, I’ll explore why.



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