The strategic impact on companies of the exponential technological rate of change is both extensive and fundamental. How can you plan properly in an environment where information technology capability is growing exponentially? How will that technology change affect existing markets and what new ones will be created? How can you make sure that your business is able to adapt, change and exploit this change? The technology is driving data availability to never before witnessed levels.
The potentially good news about the amount of data is that we should have more information on which to base our strategy and strategic decision making. The first step in any effective strategic planning process is to ensure that you have a broad and deep situational understanding – that you have sufficient knowledge of the underlying internal and external environments, the world drivers, industry drivers and the linkages to each other together with the strengths and weaknesses of your own business and those of your competitors. This data is becoming more readily available and by implication then our strategic analysis should improve.
Conversely, because there is so much data the process of developing a strategy is becoming a longer process as the data is gathered, aggregated, assimilated and then analyzed.
Interestingly, part of the solution will reside in the very same technological advances that create the challenges in the first place. Imagine a situation where our limited capacity for processing exhaustive information is addressed through ever more ‘intelligent’ technological solutions – where data, information, priorities and even decisions are managed on our behalf. If you think that is an unrealistic expectation, the capability already exists. It is actually just a question of the time it takes for the adoption cascade to complete.
Strategy developed through artificial intelligence is perhaps difficult to envisage and any entrepreneur worth his salt will tell you that strategic intuition is the key to truly effective strategy development. It is the understanding of the nuances that cannot be fully evidenced and anticipated just through large quantities of data. It takes experience and vision to create a truly winning strategy.
It’s pretty obvious that the pace of technological change is exciting and terrifying in equal measure. Furthermore, the accelerated pace of change is leading to the compression of short, medium and long term planning horizons and businesses need to be cognizant of that as they consider their strategic planning processes.
We believe that all businesses should be rigorously assessing technological evolution on a near-continuous basis. At the very least they should be considering what the underlying technologies that will affect them 1, 2 and 3 years hence will be and assessing that against their plans. In doing so it is essential to avoid assuming a linear development path and to recognize how much has changed over the last ten years and to expect more dramatic change over the next few years.
Those businesses that best deal with the data available in order to consider the future threats and exploit the resultant opportunities are the ones that will ultimately be successful…