Emerging technologies and new business models influence the competitive landscape in an industry by redefining how value is created for customers and what they perceive as value. Technology and data are used to reorganize supply chains, to create new e-commerce channels, to leverage AI and predictive analytics. At the current rates of digitization in this fast-changing world, firms must invest in tech, processes, data, and people to become more flexible and faster, to make better decisions, and to meet new customer demands.
In his book “Adaptability: The Art of Winning in an Age of Uncertainty”, Max McKeown said, “All failure is failure to adapt, all success is successful adaptation” (McKeown, 2012). He explained that innovation, strategy, branding, marketing, and operations are useful but not enough. New business models are needed to seize an opportunity or to respond to competitors who already seized those opportunities. Adapting to customers’ changing value perceptions smarter and faster than the situation changes is fundamental to remaining competitive, to survive but above all to win.
However, the inertia to change turns out to be a substantial barrier for many incumbents. Many established firms are badly hit by changes. Firms fail to successfully exploit new opportunities not due to their inability to take action but to take appropriate action. As resistance to change is in our nature, they have a tendency to follow established patterns of behavior even in dramatic environmental shifts. Maintaining the status quo is a dangerous illusion. Although firms’ internal processes are hard to change and although investing in new (technological) resources implies tough trade-offs in resource allocation, firms need to overcome the everyday battle against inertia.
For example, since the strategic frames of the managers of Nokia were shaped by old ways of doing business which made them successful so far, they were not able to realize that the future of mobile phones was the touchscreen. They resisted the touchscreen revolution. It’s surprising that Nokia was quite innovative and adaptive at first. In fact, they were the first to build a prototype of a touchscreen. However, inertia led to Nokia’s downfall (Surowiecki, 2013).
Sources:
McKeown, M. (2012). Adaptability: The Art of Winning in an Age of Uncertainty (1ste edition). Kogan Page.
Surowiecki, J. (2013, September 3). Where Nokia Went Wrong. The New Yorker. https://www.newyorker.com/business/currency/where-nokia-went-wrong
