Managing disruptive change

12 Nov, 2021 - 00:11 0 Views
Managing disruptive change Technology is creating new platforms and new production, delivery and market ecosystems, that render old ways of doing business unsustainable

The ManicaPost

Ken Chitando

I WANT to recognise the leadership of the ZNCC Manicaland Chapter for organising this defining event and inviting me as Guest Speaker.

 

I also want to recognise Captains of Industry and Commerce from across all the seven districts in Manicaland Province.

We are gathered tonight to celebrate our business men and women — those who have embraced and pioneered business and enterprise growth in the Province.

 

Our times are uniquely defining — Information and technological changes continue to remap business processes and the way we deliver products and services.

 

Technology is also the crucible of new products, opening up new frontiers and opportunities for business growth, but there are also attendant risks and new threats. Innovation, often on the back of technology changes, has amplified the impact of disruptive changes.

The buzz word is disruptive change — and our business models must continually evolve to take into account new developments, new products and new delivery channels.
1.1 Understanding disruptive change?

What is disruptive change?

Disruptive change occurs when the fundamental concepts and processes of an industry or business start to shift.

i. Disruptive change is often brought on by disruptive innovation.

ii. Disruptive innovation is the idea that the invention of a new product can disrupt an entire market, changing what consumers want out of a business or create new customer tastes and preferences;

iii. Disruptive changes also imply new interconnected business ecosystems, as arising from new technology or technology related innovations.

Disruptive change is often unpredictable, with unpredictable implications on the market, current products or services.

 

Until the advent of the Cell phone, we all continued our mundane daily activities, blissfully, unaware of what would soon hit the market.

 

Today, nearly 80 percent of the population in Zimbabwe has a handset and significant business is transacted on these gadgets.

Disruptive changes impact directly on our businesses, changing our operations and delivery models, our interaction with customers, our relationships and ultimately, our finances, hence the bottom line.

Illustrating the ever changing business frontiers and the growing technology impact, new innovations continue to disrupt the market, across nearly all sectors, in particularly, health, communication, banking and finance — Block chain, Big Data, Machine Learning, among others.

 

What is clear therefore, is that the way we conduct business over the next five years will be significantly and materially different from the way we conduct business today.

 

The effects are deterministic — beyond business and markets/ market linkages.

Across the board, society continues to be impacted considerably — from health and safety, to education curriculum, sports and other civic endeavours — nothing will be insulated from this Disruptive Change.

 

Technology is creating new platforms and new production, delivery and market ecosystems, that render old ways of doing business unsustainable.

It is a highly dynamic business environment, compounded also by globalisation – the world of business is evolving into a global village.

1. DISRUPTIVE CHANGE IN BANKING

As technology rapidly evolves, consumer needs have also changed.

 

With the recent innovations around banking and establishment of innovative payment platforms, the holding of cash will soon become thing of the past.

 

The banking and financial services sector has had the following innovations that have changed the frontiers of business: –

Mobile banking;

·Alternative retail financial services (offered by retail chain stores, and monetary transfer agencies);

Digital currencies;

Digital banking;

i. Digital account opening;

ii. Application programming interfaces (APIs);

iii. Video collaboration;

iv. P2P payments; and

v. Cloud computing.

Further disruptive changes that are likely to impact the banking sector in the near term include: –

i. Super Fintechs and Contactless banking;

ii. Cloud based systems—implication on costs, efficiency and universality;

iii. Collaborative digitalisation — third party infrastructure instead of individually owned system;

iv. Digital Ecosystems and Super Apps;

v. Central Banks Digital currencies; and

vi. AI-based technologies like chatbots, machine learning, and robotic process automation.

2. HOW TO MANAGE DISRUPTIVE CHANGE

How do we manage Disruptive change?

There are no easy answers and certainly no silver bullet to the array of challenges brought about by Disruptive Technological innovations.

But there are some critical steps that Business can take to minimise the impact of disruptive change while optimizing on the opportunities.

I outline a summary of such positioning below:

i. Invest in ICT and Technology

Companies must prioritize investing in information communication technology – not any or all types of Technologies — but specific technologies that give a competitive edge in the chosen business segment.

 

Expanding the zone of competitive edge is critical for business survival in an ever changing environment.

ii. Invest in Information Gathering and Processing
As a direct result of disruptive technology, there is now an exponential growth in information, including Big Data, as well as information on markets, products and prices.

 

Companies that will thrive in the age of disruptive changes, are those which invest judiciously in information gathering and information processing.

Data is business and information is an asset, particularly well-structured and systematically processed information which guides production, distribution, research and development, product cycle changes, among others.

Part of the information processing will be organised to ensure constant customer feedback on products, pricing, competition, new markets, opportunities and new threats.

iii. Study Competition

Important also in managing disruptive changes, is the need to study competition.

 

This is necessary to understand what is driving competition and in what direction.

 

Not necessarily always to rush headlong into everything new introduced by competition — but to understand the soundness and merits of their assumptions and other factors.

iv. Asking Questions

Corporate entities that will thrive in an environment of disruptive change have embed the art and science of harnessing the collective energies by fostering a business culture where staff at all levels ask questions.

In an environment of disruptive change business leaders, management and staff must promote a culture of intentional scrutiny, in particular continually asking questions, why are we doing things the way we are doing?

 

And what else are we not seeing?

 

What are the new possibilities or potential threats?

Almost everywhere, in every corporate entity, big or small — managing disruptive change is measurably enhanced through a culture that embeds open communication, flexibility and a readiness to learn new ways of doing business.

 

A rigid, inflexible and regimental culture is a highway towards oblivion.

The writer is AFC Bank’s Managing Director

 

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