The lines between media, commerce, and entertainment are blurring. In fact, the distinctions between various industries are gradually eroding as companies learn how to shift focus and, often, add new lines of revenue. One example: is Amazon a bookseller, a middleman for online retailers, a grocery store, or a manufacturer? Another example: is Xfinity an entertainment company or a home security company?
As my then-15-year-old nephew described his relationship status on Facebook: it’s complicated.
What’s simple: your business needs to adapt to new ways of doing business.
Strategy + Business has a terrific article about what it will take to thrive in the new industrial revolution. In it, the authors write:
It isn’t often that the broad infrastructure that underlies industrial civilization undergoes a dramatic transformation. But just such a change appears to be happening now. In a great wave of technological change, sensors are spreading through factories and warehouses, software is predicting the need for maintenance before a machine breaks down, power grids and loading docks are becoming intelligent, and custom-designed parts are being produced on demand.
They identify 10 principles for success:
- rethink your business model
- build your strategy around platforms
- design for customers
- raise your technological acumen
- innovate rapidly and openly
- learn more from your data
- adopt innovative financing models
- focus on purpose, not products
- be trustworthy with data
- put humanity before machines
Let’s look at a few of these.
There are (at least) 4 platform strategies.
In The Age of the Platform, author Phil Simon describes a platform as “an extremely powerful and valuable ecosystem that quickly and easily scales, morphs, and incorporates new features, users, customers, vendors, and partners.” He and I also talk about platforms here. Think Google, Microsoft, or Facebook. The s+b article identifies four platform strategies (enabling, engaging, enhancing, and hybrid) that your business could adopt. Understanding the role of each is also a critical first step in rethinking your business model.
Being tech savvy is not optional.
Many years ago a close family friend told me that it’s important to understand enough about a subject to know whether someone else is giving you a straight answer. I didn’t learn basic HTML because I wanted to code my own website; I learned it so I could talk coherently with developers about what was possible. I wasn’t an early(ish) Twitter adopter because I wanted to tweet about baseball. (Well, I do, but that’s a different story.) These days I don’t care whether you’re a solopreneur or an executive for a Fortune 500 company. You have to be tech savvy (and your business does too). It’s not that you have to know the tech specs for a beacon or a sensor or a smartwatch, but you do have to understand what those tech specs can enable or your business will fall behind. Which brings me to my third point.
Data only takes you so far.
I love that the authors of the s+b article talk about learning from your data (versus relying on your data). Almost everything is a data point these days, and it’s important to understand yours and how your data points can help you create, innovate, adapt, and improve. But data only takes you so far. In baseball, for example, professional teams rely more and more on analytics to determine which pitcher should pitch to which hitter and where a given batter hits a curveball versus a change-up. And, yet — sometimes the batter pulls a ball to the opposite field. Or a manager allows a match-up just because his hitter is on a hot streak. Another example: my building has put in sensors to monitor heat and AC. Our building manager sits in the office and stares at the monitor. The other day it was telling him the heat was working just fine. The only problem: I had no heat. In both cases, the outliers are data points too. Smart people and smart companies don’t discount them.
The new industrial revolution is here.
Whether you think of it as a digital-first movement or a new industrial revolution, it’s clear that the ways that companies operate is shifting. From 3D printers to on-demand manufacturing, customization and personalization are replacing mass production. Algorithms are helping consumers discover great music and retailers put your best earbuds on page 1. Sensors are identifying glitches in the machines and tracking how consumers walk through the store. And just about everyone is looking at data — whether to make a better mousetrap, perfect a sale, or solve the significant global problems of our times. The new industrial revolution is here. The question is: are you ready?