What do GE, JP Morgan Chase, Ryanair, Goldman Sachs and 67% of the Fortune 500 companies have in common.
They all claim to be technology companies and that the rapid pace of technological change was their biggest challenge. Cloud Computing, mobile computing, internet of things and Artificial Intelligence(AI)/Machine Learning were all seen to be transforming their industries.
Any company that starts up today has to change the industry it’s competing in in order to excel.
The biggest transformation is taking place in non-tech companies who are on pace to surpass tech investments surpassing that of tech corporations for the first time with 51% of investments into private technology companies coming from Fortune 500 companies, up from 29% in 2014.
It is not about building the new breakthrough technology but the real winners are those who focus on the smart application of technology into their business or market. Apple, Amazon, Google and Facebook have succeeded not by building a new widget but by transforming logistics, accessing data or connecting people. IBM still produces more patents per year than all the top 5 new tech companies together and Goldman Sachs employ more software engineers than Facebook or Twitter.
What these companies have done is to align their people and processes to adapt quickly to new technologies in order to gain a foothold on the market, as they know companies that wait for a second or third wave stay at the back of the pack. We think that transformation is achieved 20% by the technology that enables the change and 80% via improvements to people and processes.
So how does an organisation align its people and processes to embrace new technology and see the rapid pace of technological change as an opportunity to succeed rather than a threat.
1. It starts at the highest level of leadership
Leading a transformation to become a successful technology company is not a job that can simply be tasked to the CTO or CIO. The level of engagement and investment to lead a successful transformation requires the CEO and board of directors to not only be fully bought in but to be the main drivers of the change.
2. Talent is the most important asset of a technology company
While workers in the industrial era were largely interchangeable, today’s most valuable jobs, require a specific set of skills not easily found in the market. There is a generational change in employee’s mind-sets as they now come from a perspective of inclusion and need to understand not only what their job is and their task, but how that job and task impacts their department and the overall organisation.
Competitive advantage in talent acquisition remains elusive. Increasing perks and lofty wages does not work, a proven strategy is “transparency, transparency and transparency” but promoting total transparency at work, including around employee compensation, can
be painful. The core strategy is around information, improving communication and making the organisations data available to all and not on a “need to know basis” to improve their decision-making.
Organisations should train and invest in their talent, tapping their entrepreneurial spirit, passionate push for change and ability to think beyond traditional corporate norms should be atop executives’ talent strategies. People should always be the priority as it is the people who create the new ideas and it is the people who create the culture.
3. Technology needs to be at the core of company culture, not an afterthought
For companies to successfully make the transition, cultures need to change to take into account the unique way that innovation and to highlight the importance of technology and the people who manage and build it.
It is important to keep in mind that building a technology-driven culture is not just about free lunches and massages.
4. Companies need to move fast and adopt agile practices
The pace of technology adoption is getting faster and faster every year, this underscores the importance for companies to continuously adopt new technologies that can enhance productivity and also to continuously experiment with new technologies that have the potential to be disruptive to the business.
Agile development practices enable you to continuously deliver better experiences for your customers and traditional project management methodologies area relic of the past.
5. Companies need to look forward and avoid getting caught in doing everything “right”
Companies do not fail because they do not innovate and in most cases, they do everything “right”. Businesses reject innovations based on customers’ current needs while innovative upstarts develop products in a way that meets customers’ future needs.
The tech companies would rather fail, and fail fast and learn from these mistakes than do things right the first time.
In conclusion, the companies, young or old, that use technology to best create competitive advantages for themselves will win.
Technology needs to be a fundamental fabric of the company’s DNA and culture as companies truly internalise that “Every company is a technology company”.