The business context is an ever-changing landscape. This state of flux requires a real commitment on the part of business owners to scan their industries frequently, looking for signs of change and unpacking the threats and opportunities that change may bring. Sometimes businesses are at the effect of change, but are not often enough the cause of that change internally or within their industries.
Not causing change early enough inevitably results in us being at the effect of it.
Evaluate the impact of messaging services like WhatsApp and WeChat on mobile network operators’ SMS revenue. Consider organisations like Airbnb and Uber, which have grown to be significant businesses, yet are unencumbered by the asset base of legacy businesses within their sector. Reflect on your business and whether there is opportunity for similar incremental innovation, or even disruption.
In evaluating where this change may originate, you might wonder where to start looking. There are five key places to cast your attention:
A great way to appreciate your context is undertake a PESTLE analysis, which considers the political, economic, social, technological, legal and environmental contexts. This review helps keep tabs on and understand the framework in which we are conducting business. The major threats need to be identified, tracked and mitigated as far as possible. Opportunities need to be progressed with superior speed of execution.
Be alert to what your competitors are up to, but do not become so obsessed with what they are delivering that you lose focus on achieving and sustaining your business’ competitive advantage. Invest your time in understanding where your competitors play, where they will play in future and what space you can create today that will win the hearts and minds of your customers. In today’s context, what we do is largely a commodity that can be readily copied. How we do what we do is an opportunity ready to be exploited and is where one competitive advantage can be discovered.
A business’ sole objective is to create customers for its products and services. Often, we fail to appreciate that our customers are facing the same creative destruction as we are, and we neglect to keep pace with their rate of change. Forming close and mutually beneficial relationships with our customers enables us to understand their current needs and explore what future needs may be realised.
We must equally have an appreciation that our customers may indeed become our competitors at a point in time. When organisations experience tough economic times, leadership looks at horizontal and vertical integration as possible ways out. What this means is that competitive organisations may be merged (horizontal), but also that suppliers ‘above or below’ the organisation in the supply chain can be acquired. These industry changes can radically and rapidly transform the dynamics of and balance of power within an industry. Keep your eyes open and ears to the ground for signs of potential change.
As business owners, we must improve our understanding of how our skill set and products or services will be applicable in a future context. Will what we offer still be relevant? Will our offering become commoditised and therefore price-driven? We must build the capabilities within our organisations today to ensure we are ready for changes that are inevitably coming tomorrow. This requires that we actively reimagine the industry and our role within it, which enables us to prepare for and then drive the change in advance of other industry spectators.
Collaborating with like-minded business owners is a fabulous method of expanding your understanding of the business context, appreciating relevance and exploring opportunities. The multiplier effect of focused heads put together is exponential. The Fourways Community Chamber is an example of this in practice.
In conclusion, business owners start their businesses loving the idea of having destiny in their own hands. But over time, these same business owners hand over their destiny to chance through failing to consistently reimagine and reinvent. When we allow change to happen to us we are at its effect, left scrambling for relevance and margin. When we design our own change, it can be achieved in our timeframe and focused around where our capabilities and customer needs intersect.