UAE companies should make a pact with innovation
Complacency is called a silent killer of businesses - the carbon monoxide that companies are unconsciously inhaling, which is slowly destroying their organisation from within.
UAE is becoming a powerhouse for digital businesses. But are local businesses fully prepared for this brave new world?
You have a long-standing business that thrived as UAE grew into a business hub.
You have strong relationships with your partners and customers. You think you are safe for now. But you could be on the cusp of obsolescence.
Look around you. Does your business seem like an analogue business in a market that is unapologetically digital? No, don't just look at the UAE market. Once a senior executive, while explaining why his company was not moving fast enough, said his senior management did not believe in digital business because the company got its revenue from traditional channels. My question to him was, did they estimate the opportunity cost of not having a digital channel? They would never know that. Their excuse is that their customers aren't changing. Comfort zone is no place to hide.
Sometimes your competition can also become your comfort zone. Businesses get blindsided by their inner coterie of competitors. They get too comfortable with their little battles and seasonal skirmishes and miss the trojan horse approaching them from outside the market. Familiarity often breeds complacency. Before you know it, a scrappy upstart has eaten your lunch from right under your nose.
This is how Thomas Cook was caught unawares. It is 16 times older than one of its disruptors, Airbnb, whose meteoric rise showed that travel habits were changing.
But Thomas Cook wasn't. The package tour company was rigidly relying on its loyal customers and brand to keep it going. Brand loyalty is not a good excuse for not innovating. The likes of Nokia have taught us that it doesn't take long for that to change. Thomas Cook went bust because its service offering seemed utterly out of place in a digital world.
But you don't have to be a 178-year old company to be complacent. You could be as young as Forever 21 and still get it wrong. The fast fashion company thought that its variety-based brick and mortar business model that worked miracles with its millennial customers would remain relevant for Gen. Z. Not this time. It underestimated the school and college going students' discerning ability to hunt for deals online, for clothes that make them stand out. Being 'young' is no excuse for becoming complacent.
Complacency is called a silent killer of businesses - the carbon monoxide that companies are unconsciously inhaling, which is slowly destroying their organisation from within. An early sign could be the inordinate amount of time taken by senior management to decide on an innovation initiative. A senior executive once told me about how they were planning for several months on how to move ahead with an idea. His excuse was we-are-not-ready-yet. Months and years pass by in planning for a plan. Then you realise that your competitors are moving ahead with innovation that your line of business executives had proposed a long time ago.
Maybe your executives moved to your competition to execute on the same idea they had initially proposed to you.
Your teams are proposing many fledgling ideas that are getting aborted before they could become a new revenue stream. The new coveted blue ocean was meant to be your territory. But instead your competition is swimming in it.
Many of the job aspirants that I have interviewed have stated fear of obsolescence as their key motivation for job change. Their current organisation is not trying anything new. They think they are working for an organisation that is no longer willing to take chances. Change has become a scary word within the organisation.
In a candid interview, the Deputy Chief Minister of Delhi admitted that the biggest hurdle in transforming education in his state was the mindset of the bureaucracy that if it isn't broken, why try to fix it - a dangerous line of excuse we hear from IT teams in slow moving organisations.
When an obscure British trading company landed on the shores of India in the 17th century, it realised pretty quickly that India was up for grabs. Reason being the complacency of the Mughal government that failed to modernise its military because it did not anticipate any challenge from foreigners. The heavy bronze cannons of the Indian rulers were no match for the mass-produced guns and cast-iron cannons of the British. In the next 200 years, the East India Company chipped away at the Mughal empire without much effort. World history is replete with such examples of complacency. So is business.
At least 18 retail businesses have filed for Chapter 11 in the US in 2019. Their guns effectively used to keep competition at bay is now obsolete. UAE businesses have to watch out for competition from anywhere. You may not be a Kodak operating in a market that changed dramatically, yet you could still be staring down the obsolescence barrel. Innovation decision cycles need to be shortened so that product, marketing and IT teams have time to take their chances, recalibrate and move ahead. Innovation must be a constantly moving target.
- Shalini Verma is CEO of PIVOT Technologies