No matter how well your business seems to have worked for you up to this point, you can be certain that it will need to be heavily transformed for tomorrow’s new world-wide economy and no industry sector boundaries. New digital technologies, business models, and regulatory rulings are forcing all of us to think outside of our silos and rethink what it means to operate effectively.
For example, only a few people today still think of Amazon as an online provider of books and related goods, now that they have exploded their business world-wide into every product arena, added web services (AWS), television and film production (Metro-Goldwyn-Mayer), a bricks-and-mortar grocery chain (Whole Foods), and more. None of us can afford to be a silo anymore.
As a business consultant, I can get you started in this transformation, but I was pleased to see more detailed guidance, including things to watch out for, in a recent book, “The Ecosystem Economy,” by Venkat Atluri and Miklos Dietz, both senior partners at McKinsey & Company with much experience. I will paraphrase their key strategy challenges here, with my own points added:
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You can be too focused on the short-term. Transforming your organization for the new global economy requires perseverance and long-term thinking. Lay out the potential growth trajectory of your business environment carefully with reasonable milestones, to strike a tight balance between long-term and short-term parameters and judge progress.
In many cases, I see leaders lulled into a false sense of complacency by adequate short-term returns, and the pressures of daily operations. I urge you to block out time on your calendar at least monthly for more strategic thinking and long-term goals and objectives.
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Outsourcing the entirety of building a new system. Outsourcing may look like a quick and easy solution, but you can’t let a partner or supplier drive your business strategy and direction, and it will never absolve you of the responsibility of providing business success. It is fair to bring in outside technology to reduce the risk and speed the implementation.
I recommend outsourcing for flexibility in existing operations, but you need to take the leadership role in preparing your company for the future. Most great business leaders, including Jeff Bezos, maintain a key internal team to study and implement the next steps.
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Not having a means to measure holistic impact. Don’t fail to develop the proper comprehensive metrics for assessing how you and any partners are doing in terms of value creation. It is vitally important to leverage your efforts to maximize all key constituents, including customers, team members, partners, and other stakeholders.
In my experience, there are still only a few people who like to read numbers and understand them, aside from data analysts. The business ecosystem of tomorrow is too complex to be run by your intuition and gut feel, so don’t forget to add numbers discipline.
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Build too far or too close to the core business. If you start building too close to core systems, a transformation can cause problems as managers try to juggle and prioritize current operations. Reaching too far out can also make it impossible to leverage synergies with the current business, and reach beyond the current culture change ability.
My own insight is that some companies can’t let go of their cores, like Blockbuster, never transforming them even in the face of a new world. Others, lured by hot new markets, abandon their core prematurely, with equally disastrous results. Always keep a balance.
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Not accepting failure on any of the new elements. Some failing elements and pivoting must be expected on all new initiatives. Rather than being too proud to admit failure, or imprudently continuing to invest, I recommend that you be transparent with all progress, good and bad, and also celebrate the learning you get from every failure along the way.
Don’t let your ego or stubbornness drive you to give up too soon on your transformation efforts. Remember, long-term success is a journey, with many challenges in the road ahead. A few wrong turns should never deter you from reaching the destination.
While any business transformation can be challenging, I urge you to always put value creation for your customers, your business, and ecosystem partners ahead of profits. The potential in this emerging world-wide ecosystem market is greater than ever before, as is evidenced by Amazon, Google, Tesla, and others already in the game. It’s time now to get busy, or get left behind.
Related: 8 Strategies To Capitalize on Untapped Global Markets