Throughout history, how many of the most innovative companies have won by playing it safe, never taking risks, and never adapting? The answer is none.
Yet in the business world, many companies continue to operate as they have for decades, playing it safe by ignoring changes in technology and expecting to achieve victory.
These decision-making mistakes are behind some of the most critical business failures today:
A failure to anticipate has accelerated the spiral to bankruptcy of a number of well-known and previously lucrative businesses. Technology and industries are constantly changing. Businesses that ignore these oncoming changes–even if they are enjoying success at the moment–can easily fall behind and fail.
Former retail giant Kmart learned the need for anticipation much too late when long-standing IT problems caused them to file bankruptcy in the early 2000s. As other retailers read the signs and opportunities of new technology, Kmart failed to innovate and upgrade infrastructure for years. In 2000, Kmart CEO Charles Conaway announced a $1.4 billion IT investment plan, but it was already too late. While management failed to make the decisions that might have turned things around, sales plummeted due to failures in supply chain effectiveness and logistics.
Many companies today face the same problem as Kmart. With cloud technology, mobile applications, and other digital resources available, businesses are facing a new technological revolution. You need to understand these changes and anticipate how they’ll affect your business.
There was a time when companies rarely altered their businesses models. After all, “if it ain’t broke, why fix it?” Faced with serious competition, many CEOs hunker down, strengthening an existing business model rather than venturing into the unknown. In short, they fail to adapt and utilize all of the resources and opportunities at their disposal.
Eastman Kodak, which filed for bankruptcy protection in 2012, and continues to struggle to survive, is a case in point. The company failed to adapt fast enough into new areas of technical innovation, instead relying on a business model that had always worked. Kodak made millions from cheap cameras that were dependent on expensive film, but when digital hit hard, Kodak never recovered.
Yet their competitor, Fujifilm, thrived. Why? Fujifilm moved decisively and ventured into new, but related businesses such as the development of films used in LCD panels for televisions, and various other electronic devices.
It’s also not enough to just invest in the technology. As Fujifilm proved, you need to modernize both the technology and your approach to doing business. Modernizing may concern some businesses if they see it as changing what “ain’t broke,” but as Kodak showed, failure to adapt can be a killer for your business.
While some businesses weigh the options of new technology and changes and fail to act or adapt, others simply bury their head in the sand and ignore the fact that there are new things to anticipate or adapt to. The challenge today is a technological revolution that is changing how enterprises conduct every aspect of their business. Failure to learn about the technology fueling this revolution will leave your company behind without you even realizing it.
Is your infrastructure able to modernize quickly? Are your employees enjoying benefits like virtual meetings and shared knowledge, so they can do more–and do it better and faster? Are you providing the best customer support through enhanced user experiences?
Without a clear understanding of new software applications and business processes, you will be unable to quickly respond to changing demands from within and from your clients. To move your business into the digital environment, you will need to be ready to devote resources–time, money, and people–toward a modernization project. You also want to look at future trends, seek out expert advice, and listen to your own people. In short: learn.
Stymied by competing risks, many managers today simply choose to postpone making a decision. But, with the rapid pace of technology and changing expectations of consumers, you are already behind before you get started.
The good news is that technological innovation also offers solutions. Through technology it’s possible to transition in a way that preserves your business values while also updating your enterprise in a way that makes it more competitive.
Today’s enterprises face strong pressure to increase benefits to customers, to operate globally, and to increase efficiency, while remaining competitive. To not move forward, whether we’re talking about technological infrastructure or business practices, is an invitation to your competition to improve upon everything you’re doing.
Investing in modernization to ensure a future for your enterprise isn’t the risk you should worry about; the real risk in business is doing nothing. So anticipate, adapt, and learn while you still can.
—Romi Stein is the chief executive officer of OpenLegacy, the world’s first and only open-source API platform for automated legacy system modernization and integration. He has a deep understanding of how to lead in this market, gleaned from 15 years at IBM’s global headquarters, where he became intimately familiar with how one of the top corporations behind legacy IT systems operates. At IBM, Romi played a wide range of leadership roles, including senior investment analyst, managing a Country Pricing Group; and principal market development consultant, where he contributed to the development and growth of new markets in North America and Europe and launched the first industry storage software virtualization family.