Joe Accardi is senior vice president and head of new business development for asset based lending at People's United Bank.
Updated: February 8, 2021
advice
Identify and address disruptive threats head on
By Joe Accardi and Kevin Sheehan
New technologies continue to disrupt industries year after year, re-writing the rules of engagement, paving the way for new competitors, and putting established players back on their heels if not out of business. Technology’s disruptive influence will continue. Leaders must embrace the reality that disruption will be an established business reality.
Disruption has come to mean swift technological change in the business world, but the COVID-19 pandemic is an example of an external medical event disrupting our whole society and forcing an exponential increase in the pace of technological change. Businesses that have fared best rapidly increased their rate of technological adaptation in order to maintain their relevance and competitiveness. While no one saw the pandemic coming, lessons learned will pave the way for small and midsized enterprises to prepare for future disruptions of all types.
Kevin Sheehan is vice president for commercial product marketing, at People’s United Bank.
SMEs must continually survey their competitive landscape to identify potential sources of disruption, including those from external non-technological sources, and consider how those risks could affect the company, and then prepare by developing or acquiring the right capabilities and resources to adapt and thrive.
That’s easier said than done of course. SMEs often don’t assume a proactive approach for several reasons: Successful SMEs have often conducted business the same way for decades, which has led to their success; further, those responsible for past success often come from the same background, and identifying disruptions on the horizon often requires a different perspective and vantage point; and most SMEs spend significant time conducting their day-to-day business and lack the time and resources to think big picture.
But given the pace of technology development, vulnerability we have to global challenges, realities of the competitive environment, and consequences of being caught flat-footed, SMEs must find ways to prepare for the inevitability of disruption.
Leaders must value thinking strategically about disruption and embrace its inevitability. Without leadership from the top, no strategic initiative challenging the status quo will get off the ground. Going one step further, leaders need to recognize the value of having trusted advisors who will challenge them to push the envelope and bring differing perspectives. Surrounding yourself with “yes” staff and colleagues will not help challenge norms and businesses practices. Having people willing to speak truth to power is rare and valuable.
It’s more than a small circle of high-level leaders and advisors; the corporate culture must encourage rank-and-file employees to think creatively about disruption. Unless this culture is fostered through the ranks, most employees will hesitate to raise uncomfortable or unpopular issues. Perhaps most important to remember is frontline employees often have the best antenna to sense shifts among customers and competitors.
Establishing formal processes to create time, place, and opportunity to unplug from the day-to-day work and demands to allow for creative thinking and brainstorming is crucial to success. Incentives such as bonuses may give employees extra motivation and the reassurance these outside-the-box ideas are welcomed and valued.
Disruptions – technology or others – stand to potentially threaten SMEs, but do not have to if addressed and prepared for appropriately. Whatever the challenges, leaders need to move decisively to express these priorities and remove cultural barriers to change.
WBJ Web Partners
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