While experts have proclaimed that every company is a tech company; business leaders often miss the point. Mainly if the technology is not embraced as an enabler, then it will come to disrupt your business model.
While this view does lead to a sense of urgency, few leaders stop to ask whether their tech strategy is moving in the right direction. As such, how can you overcome the impulse action for the sake of action? Not falling for the hype is a good start. But the next step is to identify why your tech strategy is wrong.
Being First Is Not Always Best
While you want to be ahead of your competition, the concept of “winner takes all” does not really apply in the digital economy. One reason for this is that many leaders misunderstand how their business model works.
You might want more customers but at what cost? If you are a tech company like Facebook or Amazon, the answer really doesn’t. But if you are running a small-to-midsized business, then the cost of customer acquisition has a tremendous impact on your viability over the long-run.
In addition, being first often means that you have to make a lot of mistakes before proving if your business model can work. While these mistakes are often opportunities to learn, they do require time and money. As such, there are times when it is better to learn from pioneers than to be a pioneer yourself.
An example of this is when you are searching to automate a process, while important, which is not core to your business. Take human resources. Does it make sense to build your own disability management solution, or should you just plug an existing solution into your business processes?
Sometimes, The Old Way of Doing Things is Better
Yes, we are living in an age of tremendous digital disruption – one where almost no industry is immune. There are times when the old way of doing things might be better than a digital solution. However, this paradox also creates a challenge for business leaders as it can often be difficult to identify when a digital solution can complement a process or replace it altogether.
A big reason why this happens is that the market is a complex space where an advantage is often fleeting. This means that multiple elements, some tangible and some intangible, go into determining the best fit for technology within a system. Some of these include the expectations of customers, how seamlessly technology can integrate, and even the capabilities of the organization.
As such, don’t assume that just because there is a “new way” of doing something that it is better. Instead, understand the process you are trying to improve and then pick out the technologies which are best suited to enable the change you want to achieve.
Location, Location, Location
Even though the internet has made it easier than ever before to reach audiences around the world, the fact is that closeness to your customers still matters. This is a big reason why all retail hasn’t transitioned to e-commerce.
In fact, researchers have found that face-to-face interactions are often undervalued by business leaders. Sure, many of us prefer to go online to contact customer service, there are times when having a personal interaction in real life can help to strengthen the customer experience.
As such, proximity to your customers still matters. Not only does it help to close the convenience gap, but it also means that your team will have a better affinity for the needs and wants of your customers. If you take strategy doesn’t consider the importance of location, then you might want to rethink your plans.
There are times when going fast can do more harm than doing nothing at all. This is especially true when you are reengineering an important business process. Going fast might cause you and your team to overlook the important linkages, which could lead to lost data (e.g. when MySpace lost 12-years of user data) or even worse misunderstanding the customer experience.
As such, any tech strategy should seek to understand the processes you are trying to automate first. From there you can determine the best course of action. If not, then you risk having to go back and redo all of your efforts and this could mean missed deadlines and added costs.
Is your tech strategy wrong? Use these four factors to see if you or your team have missed something?