Beware the S-curve. Businesses often start out slowly and then enjoy a period of rapid growth, only to see revenues level off once they reach market saturation.
Truly great companies recognise that trap. They know they must constantly reinvent themselves with new business ideas that move them on from the previous success.
However, it is not enough to simply guard against a financial S-curve.
There are also three hidden S-curves that measuring the company’s market relevance, the distinctiveness of its capabilities, and its talent development. They level off well before revenues begin to flat-line.
Information technology is routinely expected improve products and services, or operational capabilities, but it can also be a driver of corporate change. This is the type of change that prevents companies peaking and then fading.
As a facility, it can help across all three of the hidden S-curves:
1. On the edge of tomorrow’s markets
Markets constantly move on and leading companies must harness technology in order to anticipate how.
By focusing on the leading edge of customers’ needs and wants, often from the edge of their own organisations, rather than at the centre, companies that use technology to identify market insights can steal a march on their competitors. This encompasses:
– Watching what customers do: tracking data on purchases and returns, analysing data such as satisfaction surveys, monitoring what customers do online, and observing customers in-store are all ways to identify hidden market opportunities.
– Listening to customers: smart marketers keep their antennas up on customers’ conversations on social networks and online forums, and modify their products and services in response to what they hear.
– Collaborating with customers: some companies have begun involving customers in the design of products, through crowdsourcing projects and online votes. Others have global intranets that enable employees around the world to identify colleagues trying to develop similar ideas.
2. Matching management to market change
High-performance businesses must renew their management talent well before financial performance begins to taper.
IT can help companies to both manage the process of renewal and ensure the top team works more productively together. Key aspects include:
– Managing top talent attrition:Predictive workforce analysis enables companies to identify areas where key performers are more likely to leave and develop strategies to counter such risk – retention programmes, say, or succession planning.
– Improving career progression: HR management systems can track employee skill levels and support succession planning on a global basis.
– Raising productivity: Technology can help senior executives work more effectively. Smartphones and tablet computers may keep them in touch with the company’s information systems at all times, for example, while video-conferencing can save on the cost of travel and the time it wastes.
3. Generating and sustaining surplus talent
In order to run the current business at its maximum potential while also exploring the next set of opportunities, businesses need surplus talent.
Again, technology has a key role to play in helping companies recruit and develop the workforce in the most appropriate and cost-effective ways:
– Fostering constant learning:technology is the key enabler in training and development, through distance and e-learning, for example, but also via education management software that identifies, updates and helps to meet employees’ needs.
– Sharpening talent acquisition systems: Some companies are moving beyond conventional HR systems. One example is the virtual screening software on some company websites that enables potential employees to match their skills and values to those of the business before deciding whether to apply.
– Using social media: Companies that want the best talent have to look for it in the places where it most likely will be found. Facebook, LinkedIn and Twitter, for example, are all potential recruiting areas.
Putting it all together
No single technology initiative will catapult a company onto the next S-curve.
But the IT group can and should help the organisation jump the three hidden S-curves while the core business is still healthy.
That’s what is needed to allow the company to achieve lasting greatness. And that’s what IT can do for strategy.
Gavin Michael is Chief Technology Innovation Officer at Accenture. Paul F. Nunes is executive director of research at the Accenture Institute for High Performance.
Nunes the co-author of Jumping the S-Curve: How to Beat the Growth Cycle, Get on Top, And Stay There (Harvard Business School Press, 2011).