Disruptive technology in business: how to survive in an era of chaos
Prof. Piotr Ploszajski teaches on the CEMS programme at the SGH Warsaw School of Economics and here he discusses how disruptive technology shapes and re-invests business.
Today, the whole economy is ‘new’
The term ‘New Economy’ is typically used to describe new, high-growth industries that are on the cutting edge of technology and that are the driving force of economic growth. This new economy is commonly believed to have started in the late 1990s when high-tech tools such as the internet and increasingly powerful computers began penetrating the consumer and business marketplace. At that time, companies in the new economy were heavily involved in the Internet and biotech industries, but the ripple effects of new technologies have since spread out to all other industries as well.
The result is that today there is no longer a division between an ‘old’ and ‘new’ economy: indeed, the whole economy becomes ‘new’ today. Every company, whatever the sector they are operating in, finds itself constantly required to be on the lookout for the latest technological developments that may directly or indirectly influence their business. Moreover, these technologies transform conventional thinking on strategy, marketing and innovation, giving rise to a new set of business rules.
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Over the years, the business world has become accustomed to seeing mature products wiped out by new technologies and ever-shorter product life cycles. But now entire product lines – whole markets – are being created or destroyed overnight. Disrupters can come out of nowhere and instantly be everywhere: and once launched, such disruption is hard to fight.
So what can a company do to predict or defend against big-bang disruptions? The hard answer must be – nothing! However, in this context, it is critical for firms to gain an understanding of the new realities of the market and transform their organization in order to provide quicker and smarter adjustments to those realities. Indeed, the stark reality is that everything invented in the last one hundred years will have to be re-invented within the next fifteen, the major danger to any company being an inability to see the connection between today’s fiction and tomorrow’s reality.
Taking it to the edge
Today, there is an infinite amount of ink and pixels spilled on most any topic, making the job of a company’s business intelligence unit both rich and taxing. However, the principle today points rather to the fine print and tiny announcements, meaning that the greatest nuggets of information and foresight are located at the edges, not the center – weak signals are worth watching, not the strong ones. Indeed, if something has become a strong signal, more often than not it is unimportant from the point of view of business opportunities. Too bad for those seeking acclaim: If everybody says your idea is great, best to drop it – because it’s most probably too late.
Dealing with complex economic, social and organizational systems that operate on the edge of chaos, today’s managers and entrepreneurs alike need the ability to pick up subtle changes, even without knowing quite where to look for them and by looking everywhere at once. If we take a look at the major revolutions in business, almost all of them were started by a small group of people huddled around a beer in a bar – and there are millions them going for a drink every day: metaphorically, we have to spot the ones that will start a revolution, whether it is a new technology, customer value, market trend, or business model.
Weak signals, strong messages
Given that the future most likely manifests itself on the edges, detecting weak signals is nowadays becoming one of the most critical managerial skills. Big social, economic and management systems (just as much as biological) are chaotic in nature as they are defined by chaos theory. And as we all might know, the main feature of a chaotic system is the so called sensitive dependence on the initial conditions – more widely known as the butterfly effect: tiny changes in one parameter of the system may eventually produce a profound effect somewhere far away in that system: a butterfly beating its wings over Japan may ‘create’ a tornado in South America.
This brings us again to the importance of detecting weak signals in business early on. Business in general, but even more crucially the managers on an individual level, need to build and constantly develop a personal system of antennas continuously reading the environment in search for new, important but still tiny, developments. However, the big problem with weak signals is that there are far too many of them, and most of them with no real meaning, though it is certain that an obsession in tracing weak signals in faraway places, seemingly distant from where we stand and supported by well-selected antennas such as smart-info platforms, inspirational blogs and magazines such as Kevin Kelly’s Wired, will give our students as well as business clients and their companies a real life-time competitive advantage in these times that are increasingly chaotic and butterfly-like.
The art of survival in the 4th Industrial Revolution
There exists no single model that leads to success despite what myriads of management books and MBA programmes in the last 50 years have been suggesting. Yesterday’s either-or framing is a gross oversimplification. Take a look at the airport bookstore (something of a personal crusade), its shelves typically stocked with three kinds of books: cookbooks, romance, and business/economic books. Look at the titles and it will describe this oversimplification we live in: “Four Simple Methods to Fight Global Recession”, “One Minute Manager”, “Become a Leader in Three Weekends” (sitting next to “Becoming a Surfer in Three Weekends”).
Tolerating, accepting, and, yes, revelling in paradox is the approach demanded by our chaotic economy. Management today is paradoxical. It requires: efficiency and openness, thrift and mind-blowing ambition, nimbleness and a workplace that fosters creativity.
Organizational systems based on the Newtonian model are not equipped for these dualities. Moreover, managing a creative company today entails a balancing act between the potentially opposing goals of encouraging creative freedom and ensuring an orderly process and consistent financial results. Management is (almost) never about 0-1: good-or-bad, yes-or-no, wise-or-stupid, short time-or-long time, people-or-profit, tradition-or-novelty. It is about fine lines and the necessity of finding the right balance between hierarchy and spontaneity, necessary control and tendency for experimentation, benefits of standardization and leaving a space for “deviations”, closed and open innovation, useful employee integration and protecting creative ‘unadjusted’ individuals. And it is a general reality that companies clearly have a problem with this.
Today, only the hybrid companies will survive, those able to combine the two seemingly contradicting organizational formulas: a corporate rigor and a ‘garage’ vigour. One of the things that makes a great company today is realizing that somewhere on the planet Earth, in some backyard garage, there’s a kid who’s going to do it better.
In conclusion, this age is witnessing the end of management as we knew it, and in every aspect:
• strategy (emergent, based on weak signals)
• business models (cross-sectorial, patchwork, technology-based)
• marketing and branding (many small interactions on customers’ terms)
• decision-making (real-time big data-based, predictive modelling, information symmetry)
• a company’s architecture (loosely coupled, fluid, curious, paradox-imperfection-based)
• the customer (well informed, spoiled, erratic, connected)
• competitors (coming from outside, convergent)
• innovation (open, emergent)
• competitive advantages (short-term, both construction and self-destruction)
• human resources (multi-cultural, independent, mobile, life-centric)
• an economy’s structure (no sectors, global transformation, new global centres of gravity)
• the management paradigm (no more either-or)
• the major management metaphor (quantum systems, holography).
Accordingly, and as a final word, a business leader has to do three things well today: driving design, driving technology, and thinking paradoxically. Some people who are really good at one can build a pretty good company. People who are very successful are good at any two. The true business visionaries have to be good at all three.
CEMS is a global alliance of 31 of the world’s leading business schools, 73 multinational companies and 7 social partners, that together offer the CEMS Masters in International Management (MIM).
Automation of repetitive tasks leads to higher value work
Two-thirds of global office workers feel they are constantly doing the same tasks over and over again. That’s according to a new study (2021 Office Worker Survey) from automation software company UiPath.
Whether emailing, inputting data, or scheduling calls and meetings, the majority of those surveyed said they waste on average four and a half hours a week on time-consuming tasks that they think could be automated.
Not only is the undertaking of such repetitious and mundane tasks a waste of time for employees, and therefore for businesses, but it can also have a negative impact on employees’ motivation and productivity. And the research backs this up with more than half (58%) of those surveyed saying that undertaking such repetitive tasks doesn’t allow them to be as creative as they’d like to be.
“When repetitive, unrewarding tasks are handled by people, it takes time and this can cause delays and reduce both employee and customer satisfaction,” Gavin Mee, Managing Director of UiPath Northern Europe tells Business Chief. “Repetitive tasks can also be tedious, which often leads to stress and an increased likelihood to leave a job.”
And these tasks exist at all levels within an organisation, right up to executive level, where there are “small daily tasks that can be automated, such as scheduling, logging onto systems and creating reports”, adds Mee.
Automation can free employees to focus on higher value work
By automating some or all of these repetitive tasks, employees at whatever level of the organisation are freed up to focus on meaningful work that is creative, collaborative and strategic, something that will not only help them feel more engaged, but also benefit the organisation.
“Automation can free people to do more engaging, rewarding and higher value work,” says Mee, highlighting that 68% of global workers believe automation will make them more productive and 60% of executives agree that automation will enable people to focus on more strategic work. “Importantly, 57% of executives also say that automation increases employee engagement, all important factors to achieving business objectives.”
These aren’t the only benefits, however. One of the problems with employees doing some of these repetitive tasks manually is that “people are fallible and make mistakes”, says Mee, whereas automation boosts accuracy and reduces manual errors by 57%, according to Forrester Research. Compliance is also improved, according to 92% of global organisations.
Repetitive tasks that can be automated
Any repetitive process can be automated, Mee explains, from paying invoices to dealing with enquiries, or authorising documents and managing insurance claims. “The process will vary from business to business, but office workers have identified and created software robots to assist with thousands of common tasks they want automated.”
These include inputting data or creating data sets, a time-consuming task that 59% of those surveyed globally said was the task they would most like to automate, with scheduling of calls and meetings (57%) and sending template or reminder emails (60%) also top of the automation list. Far fewer believed, however, that tasks such as liaising with their team or customers could be automated, illustrating the higher value of such tasks.
“By employing software robots to undertake such tasks, they can be handled much more quickly,” adds Mee pointing to OTP Bank Romania, which during the pandemic used an automation to process requests to postpone bank loan instalments. “This reduced the processing time of a single request from 10 minutes to 20 seconds, allowing the bank to cope with a 125% increase in the number of calls received by call centre agents.”
Mee says: “Automation accelerates digital transformation, according to 63% of global executives. It also drives major cost savings and improves business metrics, and because software robots can ramp-up quickly to meet spikes in demand, it improves resilience.
Five business areas that can be automated
Mee outlines five business areas where automation can really make a difference.
- Contact centres Whether a customer seeks help online, in-store or with an agent, the entire customer service journey can be automated – from initial interaction to reaching a satisfying outcome
- Finance and accounting Automation enables firms to manage tasks such as invoice processing, ensuring accuracy and preventing mistakes
- Human resources Automations can be used across the HR team to manage things like payroll, assessing job candidates, and on-boarding
- IT IT teams are often swamped in daily activity like on-boarding or off-boarding employees. Deploying virtual machines, provisioning, configuring, and maintaining infrastructure. These tasks are ideal for automation
- Legal There are many important administrative tasks undertaken by legal teams that can be automated. Often, legal professionals are creating their own robots to help them manage this work. In legal and compliance processes, that means attorneys and paralegals can respond more quickly to increasing demands from clients and internal stakeholders. Robots don’t store data, and the data they use is encrypted in transit and at rest, which improves risk profiling and compliance.
“To embark on an automation journey, organisations need to create a Centre of Excellence in which technical expertise is fostered,” explains Mee. “This group of experts can begin automating processes quickly to show return on investment and gain buy-in. This effort leads to greater interest from within the organisation, which often kick-starts a strategic focus on embedding automation.”