How to Future-Proof Your Business
Is it even possible to future-proof your business?
Why was it Amazon that came up with Kindle self-publishing and not Borders? Instead, the former powerhouse shut down and left its competitor Barnes & Noble hobbling along in its wake.
Why wasn’t it a hotel chain that thought up Airbnb?
What was it that stopped any of the hundreds of thousands of taxi companies around the world from innovating and cooking up Uber?
Why didn’t the movie industry come up with Netflix? Why didn’t the establishment in the music industry come up with Spotify?
These poignant questions show us that the win is rarely in the hands of companies at the top. And that an influx of readily available capital is not a guarantee of innovation. If anything, one could argue, it’s the death knell chiming from complacency.
In case you’re wondering, this is not what ‘future-proofing’ your business looks like. Why? Because these are reactionary moves. And future-proofing your business is all about proactive, predictive strategies that anticipate the future.
When done right, future-proofing your business is actually creating and designing the future.
So let’s focus on how we go about future-proofing our businesses and what questions need to first underpin these strategies.
Questions to Ask to Help Future-Proof Your Business
Future-proofing your business is closely related to future-casting your business. Here are four fundamental and distinct aspects that every business needs to consider before moving through with a plan for future-proofing your business.
What are our global plans?
When people hear the word ‘global’, somehow they think of multinational corporations with big, complex operations or huge, intractable issues like climate change and oil scarcity.
But global plans don’t have to be insolvable — your own business plans can take just a sliver of a slice out of that particular ‘issue’ you’re trying to ‘solve’ and simply offer a new way of thinking, a new mode of operations, a chance to innovate a new product that can slow down these big questions.
In fact, it’s not the scale of global plans that is at stake here — these are global issues because they affect all of us. And if you can create a product or service that targets a mass number of people worldwide, that sells itself, doesn’t it?
What consumers are really asking for?
Consumer preferences change — and, today, they’re not just changing, they’re being subjected to fatigue. In other words, there are so many small, rapid-fire changes occurring in the marketplace, accelerated by digital transformation, that a consumer is prone to look for novelty wherever they can.
Novelty stimulates the senses and makes what once seemed outmoded, useful again. Why else would direct mail, for example, be proving far more effective than email marketing these days?
While 42% of failed companies say that the ‘lack of market need’ is what brought them down, often, it’s actually a failure to spot the direction along which their consumers’ preferences are heading.
To continue the example, direct mail is a novelty because we’re being inundated by digital offers and because, at the same time, no one is sending snail mail anymore.
Who are our potential partners?
At a time when everyone is telling you to look to your competitors, it might be more fruitful for you to begin asking yourself where your potential partners lie.
In the future, a greater number of companies within the same industry will be working together to innovate on solutions and actually reduce the costs of manufacturing. How do we know this? Because there’s a return-to-the-drawing-board for actual technologies being created.
In other words, innovations developed by one company are helping others to rise at the same time.
Tesla, for example, partnered with Panasonic to manufacture cheaper batteries and then with Google to work on an autonomous driving car. These innovations led to the welcoming in of players like Apple, Alphabet, Avis and Tata. Meanwhile, Uber and Lyft both work with insurance companies to protect their drivers.
What is the mix of current products versus future investments?
When deciding how much of your budget to allocate to R&D and how much to put into developing, marketing and selling current products, you’ll want to figure out where these current products stand in relation to where you forecast your future revenue streams will be coming in from.
Under the tutelage of Chief Executive Satya Nadella, Microsoft quietly turned its attention to being a winner in the cloud computing business. Smart, considering they decided to hedge their bets and leave Apple to its Macbook triumph. Instead, they focused on providing even more value to B2B enterprises.
The result is that products like Azure and Office 360 accounted for $18.6 billion in revenue in 2017 alone.
Strategies to Future-Proofing Your Business
Now that you’ve considered the questions to ask, it’s time to put a few strategies into place. Future-proofing your business is a practice that requires you to look at your business from all aspects — a customer-centric focus, a brand perspective, as well as from a technological, organisational and operational standpoint.
Focus on building brand loyalty
When customers forge a connection with the brand, all other things remaining equal, nothing can really weld them apart. The good news is that people very rarely tend to actively dislike a brand — reactions, when provoked and emotions, when evoked, are usually positive — and emotionally connected customers are 50% more valuable, and are much less price sensitive
What does that mean for you? As you innovate and change your core product, you can expect your customers to move along with you — as long as you’re anticipating their needs along the way.
Experiences over offers
From augmented reality-driven device innovations to IoT, blockchain and more, the way consumers are experiencing their day-to-day is changing. Mobile already takes up 70% of all consumer behaviour and interactions and digital assistants, voice interaction design and search are transforming the landscape — once again — in which businesses and brands are operating and selling.
Experiences are, more than ever, drivers towards forging an emotional response that is far more memorable than mere personalisation or a segmented offer can ever be. Aim to offer a memorable experience centred around your product or service, delivered over technology that meets the customer where they are.
Keep an eye on emerging technology
You don’t need need to stick with one platform for the life of your business. Future-proofing means being able to be high and lean enough in your process to be able to switch and change the technology you’re working with.
Tech products and strategies themselves innovate, change and grow — and so do best practices around them. What was once unfathomable — like predictive analytics through Big Data and AI-powered intelligence software — can now be harnessed to predict behaviours and purchases, amongst other major buying indicators and decisions.
Keeping an eye on these emerging platforms and their evolution, while planning to incorporate them, will keep your business on the right path
Have the right business protection on hand
One of the most significant conversations buzzing around the future of business is the future of work — namely, the future of work in relation to employees and whether businesses will be ready to take advantage of the innovations that are arriving in the workplace.
Employee training and development continues to be the largest line item in an organisation’s budgetary expenses. According to an American business training study covered by Training Mag, here’s what that looks like in the US:
- Small format businesses spend $290,000 every year on training
- Mid-size businesses shell out $3.7 million annually on training
- Large businesses invest upwards of $13 million every year on employee training and development
Studies also show that 58% of organisations spend more than $1,000 per learner on training for senior leadership, 39% for ‘high-potential’ employees, and 32% for mid-level management.
These are bolstering numbers that tell us that business owners and C-suite executives understand the importance of ongoing training for developing their employees’ skills and talents, nurturing to take ownership of their work tasks and showing a level of investment in their future.
So you can imagine what a big impact it can make on the health and future of businesses when staff and employees leave.
In this case, future-proofing your business calls for a two-pronged approach: The first requires you to continue amplifying your employees’ skills in accordance with workplace shifts.
AT&T, for example, plans to move 75% of its networks into software-controlled systems by 2020 — and it had a contingency plan for its employees in the wake of this shift, ‘developing programs to help existing employees qualify for new roles’.
The second prong is the management of risk, that would see business undertake the right business insurance coverage tailored specifically for a situation in which a company’s greatest asset, key employees, should leave.
Instead of floundering in the wake of their absence, businesses can tide over the process of finding and hiring the perfect fit without rushing to get the role filled or losing money at the same time.
One thing is clear: Future-proofing is not a one-time thing — it’s a continual endeavor. As you progress into the future, ironically, your business gets better at forecasting and preparing. Which means that once you’ve got that future-thinking-hat (or future-casting-goggles, whichever you fancy), you’re always on the lookout for the ‘next big thing’.
Until then, however, you’re at risk of not only getting left behind but having an active hand in missing out.