The future seems like a terrifying place. Just look at science fiction. Tales of rogue robots, dystopian dictatorships, censored society and alien armies are everywhere. Then consider the Yale study that found the average life span of a S&P 500 company fell from 61 years in 1958 to just 18 in 2012. Never mind fighting the alien overlords: today’s businesses have to worry about just getting to the future in the first place.
It is clear then that today, business owners have to contend with constant technological innovations, disruptive competitors and changing customer demands more than ever before. But there are ways to ensure your business can not only survive, but thrive in the future. Below, we look at ways to future proof your business.
Think about how technology might disrupt your industry, then prepare
There is an approach to future proofing called moonshot thinking, and it is kind of as pie-in-the-sky as it sounds. But that’s also kind of the point. When businesses engage in moonshot thinking, they get their smartest employees together regularly to discuss which changes in technology and customer activity might have a considerable impact on their business in the medium to long term. The managers then put systems and processes in place to deal with those changes as and when they happen.
If you can, cast your mind back to when HMV still cornered the DVD market. While HMV were busy thinking about how to get physical copies of films and music into customers’ hands, customers were beginning to download their entertainment. After all, it was cheaper than buying a DVD, and it was instant. HMV lacked the insight to see that what their customers really wanted: movies right now, for very little money.
So while HMV kept blindly flogging DVDs, a little company called Netflix snuck into the gap in the market. And as we all know, that gap soon became almost the entire market. HMV went into administration, and Netflix earned revenues of £2.62 billion in 2013.
If HMV had practiced a little moonshot thinking and realised how disruptive streaming would become, they might still have a good share of the market.
It’s fair to say that the internet has changed the way most of us do business. When you look at things like social media and hyperlocal news, you might be tempted to think that the future of the internet will be local, small and immediate. But in fact, the internet opens up more markets to your business than anything else can. Even if you are a small advertising agency, you have access to the world’s three billion internet users when you post something on your webpage. You probably won’t have something to offer each of them, but you will have something to offer people in places you didn’t expect.
At UKBullion, for example, we realised that although gold and other precious metals were largely sold by local dealers, there was still a market online. We set up a website where we could sell small amounts of bullion and other products to large numbers of people, thereby changing the way our customers bought and sold gold. Instead of concentrating on large orders, we focused our business on large numbers of orders, and that’s where we’ve found success.
Think like your customers
Innovation is as simple as listening to your customers – what they want from you and how they want it. So how do you do that? Buy your product or use your service as a customer would. Call in to the customer service team, and see how you are treated. By simply approaching the company as a customer would, you can discover your business’ strengths and, crucially, its weaknesses. Then you can modify the business or your product before your customers even realise they aren’t perfectly satisfied.
One great example of how to anticipate your customers’ needs is the iPod navigation wheel. When Apple realised people would want to scroll through hundreds or even thousands of files to access the music they wanted quickly, they realised the classic navigation system was too slow. Spinning a wheel made scrolling through the files much more intuitive, simple and speedy. As a result, the iPod reinvented MP3 players and even helped save Apple.
Give customers a distinct experience
If you can name a market, you are probably naming a saturated market. What does that mean for future proofing? It means you can’t count on your excellent product or service alone to retain customers. You have to give them an unparalleled experience.
What does this look like in real life? Hilton Hotels decided it meant they needed to add value to their HHonors app. In the app, customers can book a hotel room and preview the room from their phone, which is a pretty standard offering. Then, they added a cool extra: customers can breeze past the check-in desk and use their phone’s NFC to unlock their room when they arrive. This means customers can go through one less step when they travel, a more than welcome change when they show up at the hotel worn out from travelling.
Consider partnerships to help future proof your business
When you think about the challenges and opportunities facing your company, they can seem daunting, especially if they require a lot of financial investment on your part. In fact, if you’re really committed to staying lean and flexible, you probably won’t have a lot of room in your budget to go around developing entirely new parts of your business from the ground up.
This is a problem for more businesses than ever before, but in a way, it provides its own solution: strategic partnerships. Your business provides the part of the equation that it has already developed, and your partner provides the other part, so you can both innovate without extensive (and expensive) investments.
Think about when Amazon announced it wanted to move into online grocery shopping. It launched Amazon Pantry, but it didn’t have the ability to sell fresh food. At the same time, Morrisons wanted to move into online grocery shopping as well, but they didn’t have the warehouses and delivery capabilities. So Amazon, with its national infrastructure and warehouses, partnered with Morrisons, with its fresh food supply chains. As a result, both companies get a foot in the online grocery market, without the time and money it would take to establish an online grocery store from scratch.
The future doesn’t need to be scary. For businesses that dream big, innovate, provide unique customer experiences, and even partner up with other businesses in strategic ways, the future looks decidedly bright.