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 at TIQQE and how can we help?
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.
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.
We have extensive experience of designing and building digital product and services for both small and large customers. Please feel free to contact any of us.