This year brought a lot of disruption to our lives and our businesses. Here in Silicon Valley, many companies have anticipated and prepared for this disruption long before it actually unleashed on the global level. We have many of our clients who are trying to understand what is next and what can be learned from Silicon Valley. We put together 5 lessons that will shape the business today and tomorrow so you can start adopting them to ensure long-term growth in the current turbulent environment.
Lesson 1. Status Quo is Dead.
In the current environment, most companies focus on their core business — preserving the past success. We put innovation, new ideas, and pretty much everything else on the back burner.
It might have worked in the previous downturns, but it wouldn’t work today. You might be doing the same thing you did before, or might be even better. Still, there are a plethora of companies in Silicon Valley and beyond that consider your status quo as their opportunity. Tech giants with billions of cash challenge your business as usual; young, hungry startups backed by affluent VC investors do the same. Geographic boundaries no longer provide any protection — world gone virtual while business threats went global.
Who feared Amazon in 2000, 2005, 2010? Many bookshops were quite happy with their status quo, while Amazon grew stronger and more dangerous. And now their status quo is gone, as their businesses.
Here at SVIC, we do a lot of intelligence for global corporations on new trends and possible threats, but we would never predict what exactly will disrupt their business and when. Instead, we are using this intelligence to outline the strategy that will disrupt the company from within to fuel growth and stability
Lesson 2. Innovation Needs to Work Today for it to Work Tomorrow.
Usually, we focus on the horizon when we think about the benefits of transformation and innovation results. But this approach has many design, organizational, and operational flaws.
First, it is hard to design something that won’t materialize in the next several years. Hence, there will be many gaps, assumptions, and flaws.
Second, changing the status quo is hard as is, and putting the benefit of this change in the future discourages people from embracing this change fully.
Lastly, it is almost impossible to create the right ecosystem around new things that innovation brings without known interactions and processes.
Focus on current developments, existing infrastructure, and your corporate culture to find where new initiative can gain traction and build upon that.
Lesson 3. Technology no Longer Produces the Value
20 years ago you could install Excel in your organization and that would generate value almost immediately. So it is quite natural that everyone is obsessed with technology, but technology is a tool and an enabler. Real transformation and value come from processes that you create.
The first advice that you get in design school is to draw the UI on paper. When you do this, you remove all the unnecessary technology distractions: alignment, styles, fonts. You focus on what matters — is your UI intuitive? If it is, it will be as intuitive in the app or on the website.
The same principle applies to businesses. Uber is not about an app; it is about freelance drivers with their vehicles and fixed payments to riders. Will this idea work with flip phones, a calculator, and a phone book? Of course — it is not scalable, but still delivers core value. And this when technology transforms a good idea into a killer product.
This approach will also help with almost every initiative you have, even in the corporate environment. Want to automate the HR process? Try doing it in Excel or google forms. Can you access or collect data? Does it still create value with 5-10 people sample group? If so, then you can think about AI, ML, Big Data, and other buzzwords.
Lesson 4. The Value of the Modern Organization Comes from People, not Assets.
In the current economy, people are no longer gears in the mechanism but value-creators. Even the small group of your employees can become key competitors to your established organization despite all the assets you own.
This paradigm has been alive and blooming in Silicon Valley for several decades. Venture capitalists are considering the founding team as the primary value driver and a success factor. But now, this concept is far beyond just startups, venture capital, and technology.
Everything-as-a-service makes starting a new business and disrupting established companies is easier than ever. Even ten years ago, you needed a lot of capital to start a software company (most “asset-light” type of business): rent servers; hire developers, designers; set payroll and benefits. Now you can do all of these things as-a-service and gig workers in a fraction of the price.
Moreover, the entry barrier for “asset-heavy” industries such as manufacturing and construction is going down as well: ubers of construction and manufacturing will lease their equipment as a service. Even banking operations could be done as-a-service!
Think about how you can hire, retain and empower your employees to transform them into active value generators. Discuss with your team how you can differentiate your company from thousands other companies that ask the same question, as shown by this McKinsey section dedicated to the future of work.
Lesson 5. Unknown Unknowns is where the Exponential Growth Happens
Without expanding the notion of possible, personal, and corporate growth is doomed to stagnate. Only by continually challenging the margins of our thinking box, we achieve remarkable success.
Known Knowns — something that you know you have skills and knowledge to perform well. It is your bread and butter, but it is where little growth happens.
Known Unknowns — something that you know you don’t have skills or knowledge yet. You are aware that you need to learn to be better or to create new opportunities. This is where the linear growth happens.
Unknown Unknowns — something that you have no idea it even exists and that it could change your life. It is a complete shift of paradigm, redefining what is possible. This is where exponential growth happens.
Did you know that you can have a compliance department as-a-service at a fraction of the cost? Or estimate how likely your employee to quit based on their communication patterns?
We work with the leading global brands in their respective industries to provide innovation intelligence, to get a glimpse of those unknown unknowns, and every time we identify several technologies that we had no idea existed before.
Those 5 trends are collected from our clients, from our innovation intelligence researches, and from our partners throughout Silicon Valley and beyond. We are confident that those are applicable to many companies and hope you can benefit from them as well. If you are wondering how to turn those lessons into actionable items, read our step-by-step guide to digital transformation.