Business transformation is the key to success in the new normal

Whether it is the recent Financial Crisis of 2007-08, the World Wars of the 20th century or the Black Death pandemic of the 14th century, periods of crisis have been followed by periods of cultural and economic boom. However, only those companies who invest in innovation and business transformation are the ones who will ride this wave to come out victorious.

History is testimony to the fact that no matter what the challenges are, those who are willing and prepared to adapt to change are the ones who emerge successfully. As the world is reeling from the unprecedented loss of human life, despair has had a cascading effect on every person’s livelihood. Many industries have suffered massive financial losses and the world economic scenario appears bleak. But some businesses are prospering despite the troubled times. What is it that they are doing differently?

Whether it is a change in the way they work, their operations, their culture, using new technologies, or an overhaul of the product itself, the businesses which are thriving are the ones that are investing in innovation. Although the thought of diverting resources from current processes to innovating might seem like a daunting task, innovation need not always be drastic and radical. The simplest example is how distilleries world-over grabbed the opportunity to produce hand sanitizers during the Covid 19 pandemic

Some of the biggest companies have opted for incremental or sustaining innovation rather than radical. Take for example, Coca-cola, one of the world’s largest non-alcoholic beverage companies, which grew exponentially by adding variations to the existing product and staying relevant through their marketing campaigns.

The most investment-intensive is radical innovation, which involves harnessing new technology and a new business model. According to the Harvard Business Review, “Radical innovation focuses on long-term impact and may involve displacing current products, altering the relationship between customers and suppliers, and creating completely new product categories.” One of the biggest breakthroughs in radical innovation was the Apple iPhone. While revolutionary inventions have been a product of the toughest periods in human history, frankly, you don’t always need to reinvent the wheel to grow.

This is where disruptive innovation comes in. First defined by the late Clayton Christensen, the term ‘disruptive innovation’ describes a process in which new entrants and smaller firms challenge industry leaders despite lesser resources by using new technology and/or business model. Disruptive innovations typically enter the market at a lower performance point but offer value in an alternative way to rapidly scale up and disrupt the whole market. The most stellar example of disruptive technology is Netflix, whose on-demand video streaming service started small, but with the subscription-based business model, destroyed Blockbuster, which was the market leader till the 2000s.

In the present situation, digital transformation in every aspect of business, not just marketing, is the key. Many big names might have a digital presence, but their business operations remain orthodox. With the way the economy and technologies are changing every 5 to 7 years, these traditional firms won’t survive beyond this decade. There has been a paradigm shift during the pandemic which has made remote working and virtual experiences a reality which many companies had only dreamt of.

It remains to see which of the forced changes will last during the recovery period. But only those companies who are planning business model innovations and experimenting at this stage will likely emerge as leaders in the near future. Disruptive innovation might sound like risky business. However, Aligned Studios provides your company with the chance to expand your business while minimizing risks. As a global management consultancy firm, our experienced consultants are equipped to aid your business transformation to adapt to the new normal.

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