How your company can also reap the benefits of exponential progress
Tomorrow is Today
There is no way to escape the speed at which innovations happen. Exponential progress disrupts prices, products and business models. But it also offers opportunity – if you are prepared to ride the wave of disruption.
In 2007, the cost of drone was $400,000. Today, you can get one for $100. In less than ten years, this technology has evolved from expensive and sophisticated to an innovative, easy to buy gadget that can wreak havoc on business models of postal and e-commerce companies. Or take a 3D-printer. In just seven years, they have become 400 times cheaper. It wasn’t long ago that robots were considered science fiction, now they are emerging in all industries. Barely two decades after the general introduction of the internet, ‘smart’ clock radios, thermostats and watches are widely available.
We live in a new world, a world where technology evolves at exponential speed. The impact of exponential innovations is astounding. Take the smartphone in your pocket, it has a camera, satellite navigation and maybe even a couple of e-books. It offers virtual alternatives for products which we used to buy individually. When a simple virtual alternative is suddenly available, the original product quickly drops in value and is accessible everywhere and to everyone. This evolution characterises the so-called ‘disruptive growth’: progress by disruption.
Disruptive growth goes beyond the smartphone in your pocket. MIT’s Technology Review publication predicts that 45 percent of all current jobs will disappear over the next two decades as a result of the developments in artificial intelligence and robotics. According to a recent report of ING, which calculated the chances of automation based on the employment split in Belgium, no less than 49 percent of all the jobs in Belgium could be automated.
‘These developments bring challenges, but they also offer opportunities’, says Guido Vandervorst, managing partner of Innovation at consulting agency Deloitte. ‘If entrepreneurs in Belgium grasp these opportunities, job creation would thrive.’
To advocate its vision on recent developments, Deloitte has launched an awareness campaign, Tomorrow is Today, that will run over the coming months. ‘The future belongs to those who are not afraid to look at the world from a different perspective and are already looking for tomorrow's innovative solutions today’, says Rik Vanpeteghem, CEO of Deloitte Belgium.
Best of both worlds
According to Deloitte, disruptive growth is propelled by three themes: digital, data analytics and cyber security.
It has become clear that companies in all sectors need to digitise. but it concerns more than just the implementation of technology. How do you create a richer experience for your customers? What is the right balance between analogue and digital? To what extent does your business model have to be revised due to digital possibilities? ‘Digital and analogue cannot be seen separately from each other anymore’, says Vandervorst. ‘A good example is what the bank sector in Belgium is doing: offering customers the ‘best of both worlds’: online accounts, but backed with professional advice for those who want it.’
Analytics is about the interest of Big Data, combined with the exponentially growing power of computing. Companies are sitting on a mountain of data and are looking for ways to draw insights from it. Bigger companies want to process the data to understand their customers better. Small-sized companies use data to find new business thanks to the forecasting strength of the available data.
‘The benefits of these new digital possibilities also come with dangers unfortunately’, says Vandervorst. ‘Companies need to be aware of and prepare for cyber risks.’ Awareness is an important factor in this. Expensive firewalls are not much use if an employee gives away data by replying to a phishing e-mail.
What is the best way for a business to survive and even benefit from the opportunities in this new world? Versatility and collaboration with start-ups is essential to create a culture of innovation in your business. This is the only way how innovations can be quickly captured, evaluated and, if necessary, implemented.
The need for a transformation on all levels of the company is a reality. In the era of digitisation, launching a one-off initiative and leaving the rest as “business as usual” is not enough. By transforming the whole company, a business becomes intuitive, creating smart systems to bring customers, employees and suppliers in touch to stimulate growth and information flow as well as to get a feel for markets.
At Deloitte the vision behind Tomorrow is Today is in full swing. For instance, a partnership was reached with the American Singularity University in Silicon Valley, which is known for its innovation stimulating programmes and events.
Last year in Leuven, Deloitte established the Innovation Centre, a guidance programme for young companies in the technological sector, active in analytics, digital solutions, cyber security and mobility. Deloitte employees share their knowledge with young talents and are able to monitor the new developments in the market. ‘A lot more can be achieved through innovation if we work together’, concludes Vanpeteghem.
Versatility and collaboration with start-ups is essential to create a culture of innovation in your business.
Preparing for tomorrow
1. Culture and awareness
The first step you need to take? Make sure you are well aware of the emerging technological opportunities and understand how you can respond to them with your current or future business.
- Do you have a corporate culture that encourages innovation and integrates good ideas in operations?
- Are your employees given time to reflect on the future?
- Are all your ideas generated internally or do you also take part in crowdsourcing?
- How often do you talk to your Board of Directors about the impact and opportunities of new developments?
- As a company are you sufficiently aware and protected against the cyber risks that this new environment requires?
2. Explore, experiment and ‘scale fast’
Resources are limited in all companies. Not every new idea can be realised, choices must be made. The art is to explore, start small and if successful, react quickly to keep your head-start. An agile organisational structure is the key to success.
- Do you have a ‘lab’ outside the normal operation of your company where you can experiment with new technology?
- Can you temporarily post employees outside the organisation?
- Are you launching too many initiatives at the same time?
3. Open innovation and new business models
Companies working on innovations in their own secret ‘dark room’ is a thing of the past. The most successful companies practice ‘open innovation’. The principle is very simple: the more people you involve, the more successful ideas you generate.
Innovation goes beyond the mere creation of new products or services. Sometimes innovation results in new business models that can cause a transformative change in existing industries. Just think what Spotify meant for the music industry.
4. Partnership with start-ups
A good way to stay up to date is to establish structured partnerships with start-ups. Recently, the most disruptive innovations did not come from classic multinationals, but hyper-connected start-ups such as AirBnB or Netflix. Belgium has several programmes aimed at corporate venturing. Think of Telenet-Idealabs, Start-IT of KBC or the Deloitte Innovation Centre.
How should executives practically prepare for tomorrow?
Deloitte put together a list of best practices seen at successful companies. Although there are some great tips below, this list is certainly non-exhaustive.
Is uw onderneming klaar voor de toekomst?
Technologie evolueert in een razendsnel tempo. Dit zorgt voor een ‘disruptieve groei’ in onze samenleving. Ofwel: vooruitgang door ontwrichting.
Votre entreprise, est-elle prête pour l’avenir ?
La technologie évolue à un rythme effréné. D'où une 'croissance disruptive' dans notre société. En d'autres termes, le progrès par la rupture.
De Standaard (6/3)
Is uw onderneming klaar voor de toekomst?
De wereld staat niet stil. De technologische vooruitgang introduceert een massa aan nieuwe producten, terwijl ze andere industrieën irrelevant maakt. Maar ze biedt ook kansen aan een slimme ondernemers.
De Tijd (5/3)
HOE UW BEDRIJF DE VRUCHTEN KAN PLUKKEN VAN DE EXPONENTIËLE VOORUITGANG
Innovaties volgen elkaar sneller op dan ooit. De exponentiële vooruit-gang ontwricht prijzen, producten en businessmodellen. Maar ze biedt ook enorme kansen – als u bereid bent mee te surfen op de golven van dis-ruptie.
COMMENT VOTRE ENTREPRISE PEUT-ELLE EN RÉCOLTER LES FRUITS D’UN PROGRÈS EXPONENTIEL
Les innovations se succèdent plus rapide-ment que jamais. Le progrès exponentiel bouleverse les prix, les produits et les modèles économiques. Cependant, il offre également d’énormes opportunités – à condition d’être prêt à surfer sur les vagues de la disruption.