Change is Happening, Even When You Think it isn’t
Japan is way ahead of us with regards to the robotics revolution at work. Driven by labor shortages, the Japanese government has launched a five-year push to help the use of intelligent machines in manufacturing, supply chains, construction, and health care. The plan is to expand the robotics market from 660 billion yen (S$7.7 billion) to 2.4 trillion yen by 2020.
Japan isn’t alone. Things are changing in the Western world as well.
Maybe you haven’t noticed it very much? Before you know it, the daily operations get all your attention. Good for revenue now, but it won’t produce a sustainable competitive advantage in the future. For two main reasons:
Even though robots may be expensive to buy now, their price has decreased immensely and will fall further. A 2015 report by BCG states ten years from now, robots will be cheaper than the cost of labor . Some say 16% cheaper. Can you imagine what that would do to price pressure?
Don’t think it’s just the industrial robot arm. Robots are much more than arms that assemble, paint or package. They can also be outfitted as external skeletons, increasing the endurance and strength of the people who wear them. Or it can just tell you what to do, helping you to prevent mistakes and to organize your work.
With robots, we can deliver faster, make fewer errors, and add much more personalization to the offer we make our customers. There’s hardly a business that won’t be affected. The businesses not joining the price and flawless delivery spiral will have to invest in other selling points. Their added value has to justify a growing disparity in price. What used to be a dollar difference may now become a 16 dollar difference. Is your offering good enough to explain that gap away?
Pressure on Your Competitive Position
And market pressure doesn’t come from robotization alone. Advanced materials will outperform normal materials and be cheaper and more sustainable to produce. Haptics, virtual reality, and augmented reality will reduce the needs for devices as phones, tablets, laptops and other screens. We’re truly at the eve of the technological revolution.
Do you think it will pass you by? I doubt it. Even the most traditional businesses, in conservative markets, will have to cater to customers influenced by technological advancements in health care, leisure, sports and entertainment. Customers’ lives aren’t compartmentalized. If we experience major benefits in one sector of our lives, we won’t want to make do in other sectors.
It’s like this: we all use satellites for navigation and for the weather forecasts. So much so, that when an airplane disappears off the radar, we can’t imagine that the plane can actually get lost. We no longer accept a disappearance and start suspecting foul play when it can’t be found immediately.
As your stolen car or lost smartphone, things become more and more traceable. Take this a step further with the Internet of Things: when all our stuff is hooked up to the Internet, it can’t get lost any longer. We’ll no longer accept misplacement, stock shortages, or faulty parts as a reason for postponed delivery or service. Just-in-time delivery will get a whole new meaning, even when you’re not a tech company.
Change Measuring Benefits
Yes, the rate of change can be measured. Stock price fluctuations, market share shifts, variations in costs of raw materials, we measure change all the time. That is to say, we track changes that already have happened and extrapolate from there to the future. It’s the same for insurance premiums, the degree of competition, or performance.
One layer deeper, we measure the change rate of the changes in our market, also called “uncertainty”. I’ve written another post on how that’s done, please find it here .
The benefit of uncertainty calculations is to ground your gut feeling in actual data. We have to do that occasionally because our cognition does play tricks on us. Take this for an example: I recently bought a second-hand Land Rover. I thought it was quite a rare car in these parts of the country. But since I have one myself, I see Land Rovers all over the place. Sigh.
This phenomenon even has a name: frequency bias.
Passively noticing more of what you’re focused on isn’t just true for spontaneous events as cars passing by. It also occurs when we’re on a fact-finding mission. When we’re actively searching for information, we tend to look for facts that support our ideas. We’re all prone to confirmation bias, and it happens even when we’re aware of it.
Hence, checking your gut feeling with actual data on change won’t hurt. But there’s more we can do than just measuring change.
Treat Change as a Given
Treating change as a given may be a discriminating factor between the average and the successful company. Captains of Industry in-variously tell me:
It’s not uncertainty in and of itself, but the unpredictability of it’s effects that we need to manage
Instead of focusing on change rates, they direct their attention at innovation and unique improvements as a strategy to stay ahead. Notice the word unique. It’s no use investing time and energy in something that the competition can do better. Get future forward today and use change to get your business into the new era.