Detect Your Fault Lines and Reinvent Your Business
If you want your business to continue its forward momentum, it must constantly evolve and adapt to markets, customer expectations, new technologies and to the competition. Turns out the physics concept described by Newton’s First Law of Motion, an object in motion stays in motion, applies equally as well to business.
So, how do you know it’s time to reinvent your business? There are some telltale fault lines proactive companies recognize, and they usually start when business is good and shareholders are happy. Companies that wait to change strategic direction until industry disruption is imminent or when business falls flat are often too late to survive, let alone thrive, after a reinvention.
Benefits of Detecting Fault Lines Early
Although transformation of a company’s strategic focus is a multilayered, lengthy process, companies that are proactive and identify where the company is at risk—its fault lines—are better positioned to survive. By identifying fault lines early, companies can get leadership buy-in for significant strategic change, prepare financially, and help employees, customers and strategic partners understand and work through the changes. It’s always beneficial to expand your expertise by working with highly knowledgeable partners who bring their experience working with other companies to the table. Undergoing a dramatic strategic shift when the business situation is dire is just too late.
While reinventing your business seems overwhelming to most established companies, adapting and reinventing in response to new input is precisely what we do every day in software development. For companies looking to change their business model, the ability to outsource software development to handle additional workload caused by reinventing your business makes financial sense.
There’s no doubt the risk of reinventing your business is high. One survey reported 80% of executives recognized the need to transform, but only one-third of them were confident that they could get the job done within 5 to 10 years due to the tremendous obstacles in the way.
Nevertheless, to not change is riskier still. Here are the fault lines companies should pay attention to.
Fault Line #1: Customers
Since we know there would be no business without customers, the first place to look for a fault line is with your customer base. Identify customers that you don’t currently serve, because you need to understand their needs and identify gaps for why they rely on others to provide services or products that you could provide them. Then, check in with your existing customers to discover their pain points and unmet needs. This helps your organization determine where it might be vulnerable to current or future competition.
Fault Line #2: Metrics
If you are out of sync with what your customers value, you most likely aren’t measuring success accurately. What performance metrics are you tracking? If your customer satisfaction metrics aren’t aligned with your financial performance metrics, it could indicate that it’s time for a strategic shift.
Fault Line #3: Team
As you look forward, you need to determine if your existing team has the skills required to execute the vision for your organization’s future. If not, you need to recruit and properly onboard new team members. The exec team is not immune to this either. Consider what might need to change to propel your future vision including changes at the top and changes to your strategic partners who support your team with initiatives such as software development, customer service and other products and services.
Fault Line #4: Industry
Is there anything happening in the regulatory arena of your industry or with technology that could impact your business? Pay attention to the competitive landscape. Partners and suppliers may be making shifts to their business that make them a competitive threat.
As described in the book Stall Points by Matthew S. Olson and Derek van Bever, once a company experiences a major stall in its growth, it has less than a 10% chance of fully recovering. Companies that are proactive in identifying fault lines, as well as adapt to customer demands and market realities are the ones who will thrive. Rest assured, all companies need to reinvent themselves sooner or later.
When that time comes, it’s important to work with highly specialized partners who can not only adapt to your changing needs, but have off-the-shelf products with the ability to customize solutions as well. One of our biggest priorities at Performance Software is to deliver reliable and innovative software solutions to meet the needs of our customers.
As your needs and conditions evolve, our service-focused teams will respond quickly and effectively. We look forward to helping you succeed. Contact us today!