Forrester research shows that adaptive enterprises are growing three times faster than their competitors. Brian Hopkins provides his insights as to why.
Firms need a new formula for success to stay competitive in the age of the customer – agility is not enough. We see many CIOs and their teams doubling down on agility as a means to cope with the accelerating pace of business. This is a result of people and technology evolving in complex upward spirals.
While ‘agile’ is a good delivery strategy within a set business model, our research finds that to stay ahead of technology-human loops, enterprises must proactively rethink themselves and adapt, or risk getting left behind. We think these firms, which we call ‘adaptive enterprises’, will dominate firms that only deliver with agility.
The idea of business adaptiveness is a core theme of our CIO research that draws together two research streams – technology-driven innovation and the future of work – as well as other insights on digital platforms and agile delivery. It is an advanced concept that we are holding up as the bar for future business excellence.
Adaptive enterprises will win by identifying future opportunities and proactively reconfiguring themselves. Forrester’s Q1 2019 North American Technology-Driven Innovation Online Survey shows that advanced adaptive companies have 3.2 times greater revenue growth compared to industry averages and that beginning firms are not growing at all.
Agility is a foundation, but to achieve this level of growth and future market leadership, adaptive enterprise firms must become more adaptive by doing several things better. Below are three suggestions from the report.
1. Acting on insights
An adaptive enterprise alters its business concept based on insights that improve the company’s odds of fulfilling future customer demand.
For example, CVS understood the customer trend towards self-service and clinic-based healthcare far ahead of its competitors in its pivot from beauty supplies to prescriptions and through its acquisition of MinuteClinic. It is carrying that conviction forward by transforming itself into a healthcare powerhouse through further acquisitions such as Aetna.
2. Leveraging platforms to deliver new value
Technology advancements lower the barriers to change, so companies that are more technologically sophisticated will more easily transition to new business models.
Mastercard was far ahead of its competition in building a big-data analytics platform. Today, it has leveraged its technology platform to extend its core business with fraud solutions, B2B payments and business optimisation services such as Mastercard Track.
3. Building a culture that embraces change
Adaptive enterprises adopt new business models more quickly and thus require employees to have more mental flexibility and less fear of change.
While the industry has overused Netflix as a platform example, it has famously established a culture of adaptability. By inspiring employees, the company has evolved from an antiquated mailing service to streaming pioneers to an original content production house.
Brian Hopkins is a vice-president and principal analyst at Forrester serving CIO professionals. His coverage of technologies includes edge computing, edge intelligence, quantum computing, insight and big-data platforms, and systems of insight. He is a contributing author to the insights-driven business playbook and the IT transformation playbook.
A version of this article originally appeared on the Forrester blog.