1.Monitor evolving needs
Know what is happening before it happens!
It is crucial for firms to keep a close watch on evolving and unaddressed market needs by monitoring global trends and redirecting resources to areas it can offer transformational value in.
i. Keep a close eye on your customer and evolving trends:
- Know their needs before them:Customer is a firm’s key stakeholder, but one shouldn’t rely on customer feedback and comments to gauge what they want in the future as sometimes they themselves don’t really know it. Firms should instead use their own experience, imagination and predictive analytics tools to hit the bull’s eye and stay ahead of the game. There are multiple tools that can be deployed to track customer behaviour, their needs and developments in the industry.For example, if you are a dine-in restaurant, your customer would have asked for curbside pickup because that’s what others in the industry are offering. Rather, try to understand why customers prefer curbside pickup – it is because it offers convenience! So rather than replicate a competitor’s strategy, invest to assess how you can offer transformational convenience – for example, could it be drones that deliver to a customer’s doorstep?
- Follow trends in developed countries: As simple as it sounds, it stands true. Firms in developing countries should regularly track what’s happening in other developed countries related to their industry. Google Alerts can be set on the topic of your interest. For example, Uber was first launched in the US but when it came to India and Sri Lanka, it still shook the whole cab hiring business. Similarly, when video and audio streaming became popular in the US, it was predictable that things will change in developing countries like India. So, businesses like BigFlix (DVD rental) soon stopped delivering the DVDs offline and shifted to an online platform.
ii. Do not rely solely on one part of your business for income: It’s time for firms to rethink their past strategies as relying on successful past strategies can lead to failed futures. A good example is how smartphones killed the camera industry. Camera and film maker – Kodak was once a billion-dollar company. After 130 years of business, it had to file for bankruptcy in 2021, as it failed to see the future of cameras incorporated into phones.
- Branch out of your core: Assessing consumer needs and trends would provide a good indication of new adjacencies the firm can venture into. In fact, successful adjacent business models are built out of a strong core. Hence, branching out of the core business to venture into adjacent business opportunities would help cater to the customer of the future and reduce overdependence on one stream of income. This ensures that the business model is built to be future proofed while risk management becomes a coherent part of day-to-day business operation, ensuring that dual or multiple avenues of income are being worked on.
- For example, Netflix’s entry into streaming and then content production, Fujifilm’s transformation from Kodak rival into a USD 20bn medical imaging powerhouse and Ingersoll-Rand’s growth from air compressor maker to power tool manufacturer, are some successful adjacent markets explorations, in high-growth as well as mature industries. Some successful explorations have included forward and backward integration as well. For example, eCommerce marketplaces like Flipkart and Snapdeal have built logistic companies that form a natural extension of their existing business.
iii. Create the new age employee:
- Reskill and Upskill – A shift away from traditional training methods is required to equip employees with skills for the future. At the core of digital transformation and being future-ready is the new-age employee who is technically proficient, innovative, equipped with soft skills and is helping organizations transition into the future. Firms could start by identifying skill gaps, creating ‘future role profiles’, and also restructuring employee performance monitoring metrics, and compensation models.
- Encourage a shift in mindset – For any effective effort towards being future-proof, whilst it is vital to reskill and upskill, what is more important is a call for a shift in the way employees are wired to think and work. No effort on future-proofing can see itself to success if employees are not geared to work towards the same objective the organization is headed in.
- Foster the culture of innovation – To identify such adjacencies and diversification opportunities, firms need a favorable environment for it. It is essential to give employees freedom to experiment, send them to tech events and conferences to increase exposure and reward them for great value generating ideas.
2. Forward Plan tech-investments
Technology is a moving target; you can’t future-proof it, but you can forward plan!
The technologies of the fourth industrial revolution are drastically changing the world we live in, evolving at a rate and scale beyond any historical trend. The impact and influence it is having on day-to-day business is making it impossible for firms to ignore.
Resilient organization have reacted to the pandemic, and sustained operations by connecting via apps such as Teams and Zoom, marketing and selling online via e-commerce platforms, apps, and social media, allowing consumers to pay for products and services though digital channels. Now, even such organizations that have managed to shield themselves from the crippling impacts of COVID-19 cannot consider themselves completely future-proofed. This is because digital and technological advancements is an ongoing process – one that never ceases to evolve. Despite efforts to forecast and predict technological advancements, more developments would continue to come to light.
So, is it pragmatic to even try to future-proof our technology for the foreseeable time ahead?
It is not untrue that businesses are exhausted of technological displacements, where they implement new solutions only to find out that it is outdated in a year or so. The pinnacle of digital transformation is an ever-changing apex. Even tech giants like Microsoft and Apple have had to evolve, as no company can reach the top and sustain its foothold without changing with it. However, no technology solution is perfect, nor will it ever be. By future proof, we don’t mean to implement something that will last forever, it just means that it should not be obsolete too soon and have continued value in the distant future.
So, what are some quick steps firms could take to be resilient to externalities in the future?
i. Select for beyond here and now – Think about the rise of Artificial Intelligence, Machine Learning, Virtual and augmented realities (VR and AR), Drones, Driverless vehicles and Block Chain Technology.
For example, AR and VR would enable immersive sampling prior to purchase, a great value-add to help consumers make the right purchase decisions. It is also predicted to be highly popular with subscription services like Apple Music and Netflix. In-flight entertainment with Qantas and Marriott Hotels even trialed virtual honeymoons to London and Hawaii as a destination marketing tool.
Such technological advancements are rapidly shaping an ever-evolving blueprint of how we conduct business in the future, irrespective of size and scale. Hence, it is important to predict relevant futuristic developments and their time to market, its approximate cost once available for commercial use and affordability to assess the level of investments to be made on any existing related technology and plan for future investment needs. When choosing tech investments, firms should consider:
- Agility and adaptability of systems to futuristic trends: Include technologies that don’t have a planned obsolescence. For example, Software as a service (SaaS) is a software distribution model in which a cloud provider hosts applications and makes them available to end users over the internet. It enables constant online updates to the software that can be done without having to upgrade hardware, avoiding the need for investment on new hardware devices.
- Scalability of technology to futuristic needs: If the technology you choose doesn’t scale, you’re traveling down a dead-end road. For example, A basic Microsoft office 365 package may not allow you to use the same product key as you hire more employees for expansion, as they may be restricted to just a single PC use.
- Compliance with Industry Standards for future relevance: Good technology should follow accepted industry standards. Once something has become an industry standard, it’s more likely to receive wide support.
ii. Ensure seamless connectivity – Connectivity of devices from one to another and between devices and human is a predictable feature of the future where seamless connectivity will be the norm, and it may be even impossible to unplug.
- Design production based on Internet of Things (IoT):If there’s one aspect of technology that is unlikely to be outdated even in the distant future, it is the Internet. If at all, it would just shape up to function differently. Hence, firms should look to build smart factories, smart offices, smart warehouses and smart distribution centers, where almost every aspect of the production line is connected to the internet. This is the popular concept of Internet of Things, where a network of physical objects embedded with sensors, software, and other technologies are connected via the internet to exchange data with other devices and systems.
The IoT also enables managing employee efficiency through Wearable Tech – wearable tech like the Apple Watch or FitBit will help track employee location and activity level. GPS trackers in large warehouses help identify employee location within the warehouse and improve efficiency. This can be also extended to the customer, where location monitoring through smart phones enables geo-fencing notifying them of their preferred products and services in the vicinity.
- Leverage online platforms to access consumer: Connected technology, platforms and applications are already highly integrated into people’s lives. Hence, it is not just the production line that needs to be connected to the internet, in fact it is more so crucial to digitize access to customers. For example, through platforms that connect buyers with sellers such as Amazon and Uber. This is ideal for startups as they can increase visibility and overcome barriers to entry increasing touch points with the customer. For those SMEs that find platform commissions too costly, they can use such platforms simply as a marketing mechanism, and not as a primary mode of sale. Educational institutions can explore advanced systems for learning, including virtual and augmented reality, as well as streamlined ways to stay connected and collaborative. The healthcare sector may deploy 5G technology to support telehealth systems that improve patient care, even across great distances.
- Store your information on the cloud: While production and sale are key functions of a supply chain, another vital aspect is managing vast amounts of information. This extends from the inception of product concept to the completion of a sale. Cloud storage offers agility, can scale quickly, can be constantly developed without disruptive or costly upgrades and is accessible from any part of the world at any time. While cyber-security is a key concern at this point in time, as technology evolves, we see this to be an issue that will be resolved through stringent governance procedure. The age of a mostly unregulated internet will come to an end.
iii. Ensure your technology is delivering on speed and efficiency
In this day and age, consumers are not willing to compromise on time, speed and efficiency.
- Work from home increases efficiency: The pandemic and technology have transitioned the way in which we work, moving from physical offices to a hybrid model of online and physical. In addition to being able to carry out work during lockdowns, it has brought about other benefits such as speed, efficiency and productivity by reducing travel time, allowing folks to switch between meetings really quick.
- Automation for speed and efficiency: Manufacturing industries, which have been upended during the pandemic, will need to look for digital transformation along their supply chains and on the shop floor to implement automation and generate efficiencies as part of their recovery. Some of it may even involve making supply arrangements more disease-resistant by using technology to minimize the amount of hands-on contact involved. Some already prevalent technologies that support with speed include laser Technology for product finishing (Levis) and 3-D printers for prototyping (Spuni).
3. Get on the green wagon
Sustainable businesses are outperforming rivals
Over the last decade, consumers have grown to be conscious of what they purchase – looking for environment-friendly, sustainable and ethically produced products. This has led to green investments becoming more mainstream. In fact, a conscious producer that is working towards accomplishing a bigger purpose is more likely to be favoured by the consumer.
i. Ensure product design and production process are sustainable
- Zero plastic and Recyclable products: Consider environmental, social, and economic impacts from the initial phase through to the end of life. ~80% of the ecological impacts of a product are locked in at the design phase.
- Ensure sourcing and products are fair trade and organic:Firms should have strong policies in place to purchase only from suppliers who treat their employees well, pay them above minimum wages and do not harm the environment. It is also vital to ensure that product ranges, for example, apparel are not farming cotton and sending loads of dyes and untreated waste water back to the environment.
- Reduce carbon footprint by switching to renewables: In fact, renewables are outperforming conventional power today and the trend is only expected to continue given the concern on environmental damage caused by firms. Firms that make the switch now will be able to capture conscious consumers as early movers.
- Post COVID-19 pandemic, renewables accounted for 90 percent of new generating capacity in 2020 and will continue to grow strongly. Wind and Solar installations over the course of 2020–2025 globally are expected to grow 8 and 13 percent per annum respectively given that the cost of installations are declining rapidly.
- Oil demand, in the meantime, is expected to dip in the future, and create significant ramifications for the sector displacing hydrocarbon assets and shareholder valuations. The industry may be at a strategic tipping point, with many oil & gas companies reallocating capital investment into greener fields, including hydrogen.
While in this article we explored, what an enterprise could do on its own to future-proof itself, our next article explores how the entire value chain can be future-proofed by being built to function as an eco-system, taking a view above and beyond an enterprise centric approach. Subscribe to our Newsletter for free to receive a notification once the issue is out.
“Surviving the Apocalypse” – 3CS, April 2020; “Experts Optimistic About the Next 50 Years of Digital Life” – Pew Research Center, October 2019; “13 Technologies That Will Change Small Business” – Hubworks, March 2017; “Levi’s Doubles Down on Laser Technology With New Customization Platform – Sourcing Journal, July 2019; “Develop future-proof strategies and operating models” – KPMG; “How To Future Proof Your Business – 8 Proven Strategies” – Profitbooks; “Green energy: How to outsmart disruption and future-proof business models” – Adlittle, 2021