Adaptive Firms Outperform The Competition
One of the key lessons learned during the pandemic is that every organization must learn to expect and deal with change and uncertainty. We have heard it again and again: The pace of change has never been faster, and it is not going to slow down. And technology executives are often right in the middle of that change.
Early in 2021, Forrester predicted that a fifth of tech-lagging Fortune 500 companies won’t make it out of the year whole. The organizations that thrive in this environment will be those that are able to capitalize on this market dynamism. Forrester finds that firms with a future fit strategy succeed in this new reality by being able to reconfigure their core business concepts to create and deliver value to meet customer needs. And the difference is compelling. Forrester surveyed leading firms and found that adaptive firms grew nearly three times the industry average.
The primary capability of a future fit tech strategy is adaptivity but what exactly IS an adaptive firm? Gary Hamel identified adaptive firms as able to “reconfigure [the firm’s] underlying business concept, by dramatically rethinking its core mission, its primary value proposition, its core competencies, the markets or industries in which it competes, [and] its end customer.” Adaptive strategies build on the foundation of the other two components of future fit strategy: creativity and resilience. Adaptive firms use customer obsession as their North Star, as delivering value is paramount. By focusing intently on the customer and constantly assessing the environment for opportunities, future fit leaders create better customer experiences, identify new markets, generate new products, and attract and retain talent.
Future fit leaders do this by using flexible technology, making decisions based on predictive insights, and having an adjustable organization that can adapt to changing market dynamics. To be adaptive, leaders should consider that:
- Flexible technology increases the ability to change. Organic evolution of the tech stack will not deliver the required speed of change. Adaptive firms leverage technology platforms and ecosystem partners to accelerate their capacity to deliver customer value at scale through thin customization layers. Platforms accelerate the uptake of new technologies and capabilities through innovations chains. A leading insurance company created several foundational technology platforms, which accelerated its time-to-market by 21% and its efficiency by 19%.
- Predictive insights uncover emerging opportunities. Firms cannot wait to witness trends before taking action. Adaptive firms constantly apply insights to predict emerging customer needs and expectations and act on those needs. Adaptive firms seek to create virtuous cycles in which they can leverage insights from customers and partners that enable them to continually provide value and identify emergent needs. A leading industrial manufacturing firm has built digital capabilities into its products to improve performance, conduct predictive maintenance, and create a tighter relationship and more value for its customers.
- Businesses are enabled through changeable orgs. Adaptive organizations are not afraid to pursue adjacent or disruptive opportunities. Tech execs at adaptive firms seek to build flexibility into their operating models. Platform teams provide consistency, scalability, and versatility. High-performing organizations structure themselves around the work that needs to be done, leveraging partner ecosystems to both unbundle work but also drive innovation. A customized business goods company quickly identified a new opportunity in the marketplace to create masks at the start of the pandemic and worked with partners to quickly introduce what became one of the most popular and highly rated masks in the US.
To learn more about how how adaptive firms can outperform their competition, check out our new guide, Is Your Tech Ready For Customer Obsession?.