"Even if you have the best in class product if you're number three in launching your product then you've just lost 50% of the potential value of that product." - Peter Stevenson, VP and General Manager, Pfizer
Market changes that once took decades now transpire in weeks and months. The unstoppable rise of automation, analytics and artificial intelligence (AI) is accelerating the unprecedented levels of speed of doing business, generating value, making decisions, meeting customer expectations, and getting products and services to market before the competition does. Very simply, speed-to-everything determines whether you disrupt or are disrupted because not being first means being last in this fast pace machine age. It’s not a coincidence that many shareholders’ reports of S&P 500 companies are littered with “speed,” “fast” and their synonyms today.
Ten years ago, companies had to learn to compete at “the China price” as globalization ruthlessly drove unit costs down. Today, your business needs to make another change by adapting to “the Google price” as well as to “Google speed.” Entry barriers to any market have come down significantly as tech entrepreneurs leverage digital platforms and quickly build billion-dollar fortunes, thereby challenging traditional business models and industries. Consider these points:
- In our Work Ahead survey of 500 IT managers, the number one issue reported was that their businesses were too slow to effectively capitalize digital.
- A new study confirms that many retailers have been too slow to invest in the areas that create competitive differentiation and new revenue streams, putting them at risk of being outperformed by faster moving, more innovative retail ventures.
- Data is the new oil, but companies are awash in data. You cannot match the speed of the game if your decision-making cycle takes months even for mission-critical projects. Companies that use advanced analytics and machine learning are twice as likely to be top-quartile financial performers and three times more likely to execute effective decisions.
Some companies already are competing on the speed mandate. They are transforming industry business models, challenging the status quo, taking actions and risks, and changing the rules of the game forever. Examples include:
- The success of Reliance Jio in India reached 100 million subscribers in just 170 days, or roughly seven users per second per day, forcing the competition to lower its prices.
- For Adidas, the speed imperative revolves around “significantly improving time-to-market and keeping pace with customers.” To meet this objective, Adidas is completely reshaping its business model, from range planning to product creation, sourcing, supply chain, go-to-market, and sales. Its goal is to derive 50% of its sales from the reshaped business by 2020
- ANZ Bank is leveraging AI for back-office automation to reduce time-to-market for the approval of unsecured and personal loans. According to the bank’s CTO, 1,000 hours of back-office activity have been eliminated due to the increased automation.
- Telefónica, a Spanish telecom giant, is changing its business DNA to create an all-digital, data-driven identity. The company overhauled its core business processes and systems globally, with the goal of moving to a real-time business model capable of reacting to rapidly changing business circumstances.
- Dutch bank ING has set up a transformation “war room” to get a complete overview of the status of all projects and to quickly solve issues. The objective is to speed up communication and decision-making.
Faster time to market is a competitive necessity, and this pressure isn’t disappearing any time soon. The speed of business metabolism needs to increase. When banks noticed that there was no point fighting against FinTech startups, they collaborated with them. Today, many large banks are pumping millions of dollars into startups.
So how can organizations gear up to the speed they need to win in this new, bold world? You don’t have to figure it out all at once. You just have to be willing to start and to make the organizational changes required for success. It’s far more desirable to be successful at a series of smaller tasks than to fail spectacularly upon attempting to tackle a transformation initiative as a big-bang effort. Set the direction, draw a line in the sand, and understand that line will move. There is nothing wrong with taking time early on to prepare to speed up later. The speed at which a business can successfully move depends on its starting state, namely how change-ready it is and its speed tolerance.
Bottom line: Speed-to-everything has become a strategic imperative, and most successful companies in the years ahead will be those that move the fastest. Not every company, however, can move at the same pace because each firm has its own ambitions and priorities in the new machine age. You have to find your true north, and for that you can refer to our speed framework we have developed to help leaders find the current speed of their business and goals they need to set to accelerate the pace.
With so much at stake, companies can’t afford to take their foot off the pedal.