The pace at which our world is evolving is one of those things that has become so common, we don’t always take the time to think about its impact. Phones that are used to watch broadcast media, cars that don’t need gas or a driver to operate, personal “assistants” that can place orders on command, rockets that can essentially land themselves, mapping applications that make logistics a snap; these are phenomenal developments. While these technologies and many others have made our lives easier, they have also presented significant challenges to the business community. Consider the following:
- Business model blow up. The manner in which companies make money has changed dramatically in many cases, which cuts to the very heart of business; this is easily illustrated by the retail industry. While stores used to be the primary shopping option, consumers now have access to a range of methods, including online, rapid delivery, subscription models, and mass media e-tailers. Consumers have, in fact, come to demand these options, leaving companies to struggle to meet the pace of change, with many finding themselves in a too little, too late situation, unable to survive. This disruption scenario is true in almost any industry.
- Strategy break down. In order to migrate a company through significant change, a key requirement is having a strategy that is proactive, comprehensive, and relevant. These attributes are driven by having a thorough and timely understanding of the changes that are occurring in the external environment, including industry trends, technologies, and marketplace developments. Too often, business leaders focus primarily on what’s occurring inside of their company, with a “they need us” mentality when it comes to customers. This mindset is one that greatly jeopardizes the future of a company.
- Resource reckoning. New business models utilize resources differently; examples include the need for fewer people, different skillsets, roles that are held by technology, and utilizing strategic partnerships. Each of these bring changes in workflow design, systems, processes, and costs (remember that costs directly impact pricing!). Companies that do not proactively pursue the need to change how they work tend to get left behind at the worst of times, when more savvy competitors have implemented these methods, making it impossible for others to catch up and compete; which leads to this last point.
- Financial shortfall. Integral to a successful business is the ability to generate at least good financial performance (strong results are, of course, better), thereby creating the fuel to invest, grow, and sustain over the long term. When a company does not have the right business model, it isn’t in a position to build the appropriate strategies to utilize resources well and be competitive over the long term, which leads to poor financial results; it’s all connected. Companies in this situation lack market relevance and are, too often, left without a future. Think about what this means to a business leader who is depending on the transition of their company to someone else, as the basis to fund their retirement.
The reality is that many of the advancements that we live with today represent technologies that much of society could not have imagined even five years ago. What will the next five years bring? The next 10 years? As technological advancement continues to accelerate, even the next two to three years will be highly significant. Is your company ready to face this challenge?
Remember that challenge also brings opportunity, but only for those who are well positioned to approach it. Learn more about the profound impact of disruption in the external environment, as well as how to take control and benefit from it by reading Defusing the Family Business Time Bomb. The future of any company is based on its ability to continue to be relevant to the marketplace over the long term. In today’s world, this is anything but a given.
About the Author
Jenifer Bartman, CPA, CA, CMC, MFA is the Founder & Principal of Jenifer Bartman Business Advisory Services, assisting clients in the growth and transition stages of development. Service areas include investor-ready business and strategic planning, financing readiness and assistance, growth strategies, contract roles, and executive coaching. Jenifer’s latest book, Defusing the Family Business Time Bomb, is designed to assist business leaders in addressing the most explosive challenge in a generation.
A version of the article was first published here.