Business innovation: all about how to reinvent your business

Business innovation: all about how to reinvent your business

Have you stopped to think about the existence of IBM and other long-running companies like Xerox, Kodak and HP? In the case of the International Business Machines Corp. (IBM), it has existed and been in operation for over 100 years – 106, to be exact. In a time when many companies fail to survive for more than ten years, the American company has been active for more than a century. It is undoubtedly impressive. However, the source of its long-standing, and mostly successful existence lies in the way IBM addresses the concept of business innovation.

More than a century of reinvention

There have been many moments in which IBM transformed itself since the company began selling data-gathering machines that used perforated paper tapes. The products IBM develops and its business model have been changing over time.

In recent years, however, the company has experienced a period of turbulence, with falling revenues and a decreasing share price. It was up to Virginia Rometty, the company’s current CEO, to lead the way on yet another turnaround, reorienting the company in the direction of new markets where it could take a leading position. With the changes, the company returned to posting record growth in the fourth quarter of 2017, as can be seen in this article.

Not every centenarian company was quite as successful in their quest to reinvent themselves. Xerox, which was sold this year, is a famous example. Kodak filed for bankruptcy in 2012, restructuring its business, and already launched a new smartphone in 2016. You can learn more about these two iconic companies, and their mistakes, in this article on disruptive business management.

>> Recommended reading: New consumers are coming. Is your company ready to interact with them?

Business innovation: not always seen as the best strategy

IBM is an excellent example because it is a technology company that has been competitive for a long time, modernising itself through digital transformation. However, according to a recent study by McKinsey, not every company tries to keep up with the rapid changes that we see all around us, every day.

On average, companies are only 40% digital, despite the relatively profound impact of these technologies in the media, retail and IT sectors. The curious thing is that while companies have not yet gone fully digital, we as people certainly have. Contemporary society is highly digitalised, but executives still exist who believe that it is possible to manage a company without reinventing it, without aligning it with a newly digital world.

If you are one of these executives, we have an urgent warning for you: in the business world, companies that fail to change with the times will inevitably stumble. Companies must reinvent themselves and do so constantly.

Far from completing the cycle

If you now understand that to survive (and succeed), a company must constantly reinvent itself, it is time to bring change to the companies that have yet to complete, or sometimes even begin their digital transformation. The business world’s cycle of transformation is still far from concluding.

According to the McKinsey study, only 4% of companies are fully digitised. Most of the organizations studied (30%) had made only minor adaptations, stuck in a very incipient stage of their transformation.

For those who work in marketing, the US consultancy’s report states an important fact. When it comes to business transformation, most respondents (49%) say that they focus on marketing and distribution. Products and services (21%) and processes (14%) come next.

How good is your game?

Given McKinsey’s research, the example of IBM and that of other companies that have remained competitive for so long becomes even more emphatic.

Martin Reeves, the author of the book “Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach”, believes that these organizations have something in common. At some point, their leaders asked themselves, “How good is my game?”

It is crucial for you to understand what your competitive advantages are and, particularly, your vision for keeping your business growing and innovating. One must find the best strategy because the external environment is constantly changing. But what might it be?

Mr Reeves cites a basis for such a strategy in an article in the Brazilian business magazine Época Negócios. The article refers to a “strategic palette” composed of five distinct approaches: classical, adaptive, visionary, modelling, and renewal. The author states that for “a company to ensure its long-term continuity and growth, it can use one of these strategies for one or more areas – not necessarily for the whole company.” He also emphasizes that “companies must pay attention to all of these [approaches] to last.”

Start by asking the right questions

Martin Reeves says that to promote business innovation, managers need stay attuned 100% of the time. By asking questions, for example. Even if you, as manager, do not get all the answers, you nevertheless demonstrate to your employees what they should be thinking about to achieve your goals. “Can I plan my future? If so, let’s do it. Can I shape my future? Asking questions is crucial,” the author affirms.

Mr Reeves concludes with a very successful example of business reinvention. Google restructured itself using strategies designed to maintain the company profitable over the long-term, reformulating its business model under the umbrella of Alphabet. “With that, Google continues to grow and make money, while the holding company’s other businesses invest in ideas that could soon bring Alphabet even greater profits,” the author states.

>> Recommended Reading: The Knowledge-Based Economy: Are You Ready for the New Era?

A management tool that facilitates business innovation

If you want your company to stay nimble, keep up to date, following the example of the most successful modern tech firms, you need to use digital management tools.

Runrun.it will help you reinvent your company for an increasingly digital world. With this innovative tool at your fingertips, you can your teams’ workflows organized, simplified, automatic and clear, and also manage projects, costs and activity flows. Not only that, you will save time and increase productivity. Count on Runrun.it to help you to start transforming your business now. Sign up for a free trial at https://runrun.it

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