It might seem counter-intuitive to start any major new investments in today’s times.
Companies in every industry face a lot of headwinds: a global pandemic, economic uncertainty, and history-making moves to deal with systemic racism and discrimination.
And yet, these circumstances offer an ideal scenario in which to reassess company initiatives and investments, particularly in technology where things can change the fastest.
In the face of adversity, the worst thing you can do is nothing.many wise people
Learning from History
History includes plenty of relevant examples. Pioneering companies like Disney, IBM, General Motors, Hewlett-Packard, and FedEx were started during times of economic panic and depression. The challenge of the Cold War led to the space race and eventually landing a man on the moon. Rising jet fuel prices led airlines like Southwest to seek solutions like using financial derivatives to lock-in prices or, as in the case of Delta, to acquire their own oil refinery. (Source: US News & World Report)
Business school textbooks and McKinsey reports are filled with examples of companies that have flourished during challenging times by continuing to invest in advertising and marketing (Procter & Gamble, Chevy, and Camel, for instance). But what about examples of growth through technological investment? Consider examples of countries like Japan, Korea, and Germany, all of which rose from the ashes of war through deliberate commitments to push their private sectors towards technological investments. Ireland has also transformed itself from an embattled, agrarian nation with a collapsed economy in 2008 into a global hub for technology and startup innovation.
In 2010, three Harvard Business School professors conducted a year-long study to understand business recession strategies employed by the most successful surviving companies of the Great Recession.
The study found that post-recession winners used a “progressive enterprise” strategy and stayed “closely connected to customer needs—a powerful filter through which to make investment decisions.” In other words, they served their customers better than their competition did.
The study also pointed to Target’s survival of the 2000 recession as an example. By investing in strategic technical partnerships and improving operational efficiencies, Target was able to increase its profit margin from “9% in the three years before the  recession to 10% after it.”
On the flip side, companies that didn’t invest in innovation and new technologies saw their businesses disrupted and undone. Classic failures like Eastman Kodak, Blockbuster, and Borders ignored new technology opportunities and tumbled.
Today’s uncertainty sets the perfect stage to reboot your product strategy. Evolving user demands, sudden talent availability, and the constant pressure of disruption are all-powerful forces. With bankruptcies and failures happening all around us, it’s the perfect time to reassess technology and experiment.
When times are tough, many companies play the proverbial “no” card — “We can’t do this” and “We won’t do that.”
The many reasons they use to avoid investing in new technology include:
- Existing legacy systems too large to easily replace or deconstruct
- Mid-stream projects its stakeholders are unwilling to abandon
- Silos and fiefdoms
Under normal circumstances, any one of these reasons would be enough to inhibit new technology investment...and they often do. But nothing is normal right now, which makes it an ideal time to consider a new technology investment.
Opportunity Lies in Anomaly
Now is the time to think differently. Do research. Do some experimentation. Seek out new partnerships. Abandon projects that no longer serve a purpose. You might not be able to within the next year or more.
Today’s circumstances have given everyone time to pause, to re-evaluate, to re-assess the “ordinary.” So should businesses.
The risk is low. Many business categories have suffered huge, uncontrollable blows to revenue streams with no immediate ability to recoup them. The stock market continues to fluctuate radically. Consumer behavior and demand have changed drastically. With no predictable end in sight to so much constant change, nearly every kind of business has been granted a “hall pass” for considering proactive change of its own.
Consumer demand justifies investing in new technology right now. Even before the pandemic forced people to remain locked in their homes, growing mobile dependency and artificial intelligence had placed pressure on businesses to deliver a better customer experience. People now expect companies to execute real-time or on-demand seamless experiences. If nothing else, shelter-in-place has magnified society’s demand for all things digital, the more low-touch (or no-touch), the better.
Recent events have also set an irreversible technology precedent: if an industry as analog as a mom-and-pop restaurant or brick-and-mortar retailer could so quickly adopt delivery and curbside pick-up solutions to serve customers during lock-down, how can more technically sophisticated industries not also adapt as quickly?
The blow to the economy has also created two beneficial side effects: the unexpected but welcome availability of top talent and the low time-value of money. Now is an opportune time to find some amazing technology planners, builders, and implementers and to negotiate more favorable terms for the technology products and services you wish to create.
For companies that choose this time to create better technology, it could also lead to a competitive advantage — the difference between being an also-ran versus leapfrogging ahead of competitors. The right technology moves can position you as the innovator to be envied and followed. Don’t let concerns about being copied hinder your innovation – think of copycatting as validation of your great solution.
Push past your discomfort. Don’t dismiss new ideas because they’re hard or haven’t been done before. With so many people now working from home, you're likely to have much better response rates to customer interviews and surveys to help affirm your new ideas.
If you think opportunistic companies aren’t already taking advantage of these circumstances, just consider what Amazon, Apple, Facebook, Google, and Microsoft are up to.
These times demand action
Choosing not to innovate and improve your products and services is never a smart choice. Not innovating now could spell certain death. In an on-demand world, evermore dependent upon technological advancements and adoption, all your technology initiatives should be re-evaluated.
Unconventional is the new norm – where and how are you meeting your target customers in this space, and, most importantly, where will you need to meet them in the near future?
If you’re not thinking about that now, when will you?
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