Have you done a SWOT analysis recently? Every business should regularly indulge in such introspection. In the process of considering your strengths, weaknesses, opportunities and threats, you may have found some unusual items on your list in the last few years.
Chief among those is the existential threat that at any time, someone may invent something or develop a new business model that completely erodes the foundation of your business.
Competition is nothing new, and executives have dealt with it for as long as organized businesses have existed. But a list of developments in the last century have contributed to an innovation race that has even the most established companies scrambling to keep up. The assembly line, airplane, telephone, computer, internet, and in more recent years, automation and artificial intelligence have each pushed on the throttle of competition.
Today, giants of industry like IBM, Chase and Ford are losing marketshare to companies that started in garages, emerged overnight and lit their respective markets on fire. We are all familiar with Kodak and the “Kodak moment,” which became a hallmark not just of the photography industry, but of culture as well. But today we realize that Kodak only had a moment, destined to be beaten out of business by digital camera companies that saw the potential to replace film entirely.
Executives are surrounded by cautionary tales of companies large and small that have fallen victim to products and services that were better, cheaper, more efficient. Even now, you can watch the real time implosions of goliath tech companies that are worth billions of dollars and are still less than two decades old.
Related: Encouraging Creativity and Innovation in the Workplace
So what can a startup leader do to navigate the whitewater rapids of industry in the 21st century? Consider the following best practices to follow:
Innovate from within
This is not meant to be as obvious as it sounds, but if you are not innovating: start. What I do mean is that you should develop a culture of innovation.
A business that empowers employees at all levels to rethink processes, identify better technologies and reimagine how the company delivers value will outlast its competitors.
Lou Gerstner, former IBM CEO, wrote in his book, “Who Says Elephants Can’t Dance, “I came to see, in my time at IBM, that culture isn’t just one aspect of the game–it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management–any management system, in fact–can set you on the right path and carry you for a while. But no enterprise–whether in business, government, education, health care, or any area of human endeavor–will succeed over the long haul if those elements aren’t part of its DNA.”
If you can succeed at making a culture of innovation within your company, you will over time begin to attract the kind of talent that seizes on that mission and propels you into the future.
Look outside
One of the most powerful social structures that the internet created is called crowdsourcing. The idea is that if you allow everyone to contribute a little bit (whether that is money, ideas or effort), you can harness it to accomplish more than you could have done alone.
Today, leaders must look outside of their organizations to the “crowd” and source their ideas. This can take multiple forms. Large companies frequently accomplish this by pushing mergers and acquisitions. Midsize businesses that do not have the luxury of buying upstart companies can leverage other resources, like technology transfer. If you are not plugged into the network of IP available around the world coming out of universities, bootcamps and incubators, you are likely missing the next big idea. The idea that any company can fund a research and development department to compete with the wealth of ideas produced in thousands of research labs is ludicrous. As a result, every executive needs to look outside and source innovation wherever it is.
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Watch your back
Take the threat of being replaced by emerging technologies and services seriously. Complacency is a death sentence. That means you must always be looking around to see who else is working on replacing you. If you are not convinced this is necessary, consider the fact that many startups today do a “stealth launch” specifically because they know that what they are doing will put many businesses out of business and they don’t want anyone to see them coming. That means they are coming for you, and they are sneaking up from behind. Keep your ear to the ground by subscribing to niche industry outlets, attending conferences, and doing real human networking. Your Google search is not going to surface your new competitor, but a friend of a friend from that conference in Miami might have heard a rumor from their VC, and you need to hear that rumor. So watch your back and get out there!
