“Failure is never fatal,” the great basketball coach John Wooden once said, “but failure to change might be.”
In business, this applies to firms of all sizes, from established industry giants adapting to a changing marketplace, to budding, smaller-scale startups looking to make an impact. It’s more important than ever for businesses to be able to react, evolve, and make decisions rapidly, but the good news is that it’s never been cheaper or simpler to turn technology to your advantage.
“This is a fantastic time to be a small company,” says Bill Phelps, an executive vice president and head of U.S. commercial business for Booz Allen Hamilton. “You don’t have to build anything yourself.” The number of third-party companies that offer everything from cloud-based data analytics to social-media outreach is seemingly endless, and these services generally come at a cost that can significantly improve a business’ scalability and agility.
Many of the traditional advantages of being an industry giant have eroded as companies in virtually every sector can be built on third-party foundations. “I’ve spent a lot of my career in big organizations,” says Phelps, “but I did a raw internet startup from 2000 to 2004, and we had to rent space, buy servers, commit to leases, hire employees, and a lot of the money we raised—$30 million to $40 million—went to those things. You don’t have to do that today.”
At the same time, the market demands on all businesses have never been higher. About 60 percent of business executives who responded to a survey conducted by AT&T on how technology affects business growth agreed that expanding their firm’s reach was a priority, but more than half lacked confidence in their ability to do that, especially how to do it with technology.
For many, that begins with figuring out how to leverage data. Those with thorough and easy-to-access information on, say, shipments, products, and customers can maintain a level of agility some competitors cannot. All employees—from the C-Suite to the production floor—can do more when they know more. Uses of such data can include everything from predicting and responding preemptively to a crisis (running out of inventory, for example) to optimizing brick-and-mortar locations to maximize profit.
“Everything we do at Credit Karma—from our product to our company culture—is guided by data,” says Ryan Graciano, the company’s co-founder and chief technology officer. “When you’re growing fast, it’s easy to be reactive, but that doesn’t scale. Because over half of the company is involved in some type of technical role—engineering, analytics, or data sciences—it’s natural for us to step back, identify possible outcomes, and push back if needed. We believe in progress over perfection. We try things quickly, see what works, and invest heavily where we see good traction.”
Smart business leaders are like smart poker players: They know that the best among them fold a lot of hands, and the very best will maximize profitable opportunities the instant they come along. Like tournament players who know the advantage in building a large chip stack early, the savvy executive understands that early advantages can compound over time.
“Specific organizational challenges companies face as they grow will differ according to their growth strategies,” according to a McKinsey report. “By managing organizational complexity early, however, any company can improve the odds that its growth plans will succeed—while making it less difficult than ever to get things done.”
Internally, that could be something as simple as having employees use Slack, a project management system, to communicate instead of emails. It could be scheduling brainstorming sessions to kick around ideas, especially from newer hires. Companies have to be willing to try new things as they scale upwards, in everything from team management to new technology.
“A great example is Square,” Phelps says. “Three or four years ago, my local farmer’s market was entirely a cash economy. Today, the people selling strawberries on the side of the road take credit cards because of Square.”
In the digital world, experimentation can pay off with minimal risk. Companies using mobile payment systems, for example, might try several solutions to see which works best for their purposes. Getting current and potential customers to participate in a cloud-based online poll—which no longer requires hiring a polling firm or building a server farm—is another low-cost way to acquire data, think up new initiatives, and make better business decisions.
“There’s been an 180-degree turn in the thinking across industries—we’re doing a flip from viewing the cloud as a security risk to viewing the cloud as a security enabler,” Phelps says. “These new technologies are inherently more secure, not less secure. If I’m advising a business about how to achieve better security more quickly, especially a smaller organization, I’m going to tell them to leverage a cloud product and not go out and hire a bunch of security people.”
With a focus on core competencies, decision makers can spend more time improving or expanding—or planning ahead to solve a different problem that otherwise may have derailed their growth. It’s one fundamental way that businesses can distribute their resources economically: by spending more time on their most important projects and being able to react to the market more quickly.
At Credit Karma, “we became very good at looking ahead and solving scale problems before they became major problems,” Graciano said. “For example, to prevent our credit database from being overwhelmed one day, we broke it into a thousand databases that scaled easily before the problem hit us. Along the way, we had to balance these scaling concerns with business demand — we are continually building new capabilities for our members, but the product can't be helpful if it isn't available.”
Thinking ahead, experimentation, prioritization—all are key to keeping a business agile and responsive in a market that is changing faster every day. There are more demands than ever for a business to keep up with its customers and its competition, but thanks to technology, there are more solutions too.