Why B2B businesses need speed to survive
“We won't experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress.”
So said futurist, inventor and Google Director of Engineering Ray Kurzweil in his book The Singularity is Near, on the basis that technology is advancing exponentially in a law of accelerating returns. Put another way, we’re using faster tools to design and build faster tools.
If that speed of change is difficult to get your head around – and it is – then consider what’s to come in terms of computational power alone: By 2023 the average laptop will have the same computing power as a human brain. Twenty-five years after that, that same laptop will have the power of all the human brains currently on Earth.
It doesn’t end there: since exponentially accelerating technologies – computational power, artificial intelligence, robotics, nanotechnology, biotechnology, blockchain, IoT, AR, VR and more – are now beginning to converge, the future is faster than we can comprehend.
Understandably, many traditional B2B businesses – born in a world where success is defined by measures such as ownership of assets and number of employees – are struggling to adapt to this unprecedented pace of progress. Even at the current churn rate, it’s estimated that half of the Fortune 500 will be replaced in the next 10 years. In reality, it’s likely to be even more of a bloodbath.
The global pandemic has thrown even sharper focus on this need for speed – a recent survey found companies had digitised activities 20 to 25 times faster than they had previously thought possible in the first six months of Covid.
The businesses who survive, then, will be the ones who embrace speed and agility as the drivers for success in this exponentially-changing world.
The importance of imagination
All that said, businesses who limit themselves to merely upgrading technologies in their quest for speed and agility are unlikely to thrive. Much of the disruption has been caused by digital upstarts scaling at pace through new business models such as access-over-ownership, freemium, marketplaces, on-demand and so on.
So for B2B businesses, true digital transformation requires a fast-paced reimagination of their own business models for a digital world.
Siemens, a manufacturing company that’s been around since 1847, have done exactly that through their Siemens Mobility subsidiary, whose MoBase platform is an online marketplace for rail products and solutions. With over 800,000 products from different manufacturers, it connects professionals across the globe and offers other services such as 3D print-on-demand spare parts and training.
In a similar vein Candyspace recently helped Rolls-Royce explore, define and build a disruptive new business model: an open platform to facilitate the sharing and monetisation of data and digital solutions across the aviation sector, Yocova. It now boasts over 850 members across the globe including professionals from airlines, OEMs, airports and other aviation industry players.
Time, as ever, was critical in securing internal funding, and through rapid ideation and build – marrying customer need with business goals – we were able to bring an MVP to life in four weeks.
Freedom to flourish
The challenge now for B2B businesses in these turbo-charged times is to make a success of these new innovations in their bid for survival.
A sobering thought is that right now – according to this survey – only 21% of executives believe that they have expertise, resources and commitment to pursue new growth successfully.
It’s not too surprising. Most traditional B2B businesses were built on a bedrock of cautious stability – the rapid innovation that has brought so much success to the disruptors is alien to them. With the best will in the world, ingrained culture will not change overnight, legacy processes, systems and technologies don’t budge easily and mindsets often remain fixed in the past.
However, businesses who have established innovation hubs, in-house accelerators or digital teams that sit outside of the shackles of the existing infrastructure, processes and mindsets of the organisation are the ones most likely to keep pace with the disruptors. Those offered the fullest freedom – in terms of technology stack, talent and process – are likely to run the fastest.
Life sciences giant Merck has embraced this approach, with each of its three business units operating independent R&D units that pursue their own innovation strategies. Three hubs across Germany, the USA and China connect internal employees, external start-ups and visionaries from across the world, all working collectively on new products, services and pioneering new business models.
One of the outputs of this is a novel security procedure that uses machine learning to link physical objects to a blockchain through their own unique identifiers or ‘fingerprints‘ – with game-changing implications for the pharmaceutical and food sectors that rely on product authenticity.
Keeping pace with the customer
Disruptive new business models are typically founded on a relentless focus on the customer and this is no less important in B2B as it is in B2C. “Customers expect the same digital solution sophistication level in their business life as they do in their personal lives. You need to be ready for their expectations of simplicity of use and good performance,” says chief digital officer of Caterpillar, Ogi Redzic.
As such, the speed, quality, consistency and personalisation of customer interactions is paramount for all B2B businesses.
The Chamberlain Group – a nearly 70-year-old business making garage door openers – is completely reinventing itself around the needs of its customers. “We are moving from a company that opens doors to one that creates seamless access journeys by connecting people, points and events,” says CTO Gani Nayak.
That involved launching an ecosystem of connected products and services including the first-ever garage door opener with a built-in wide-angle camera and two-way communication, in-garage Amazon delivery and a connected doggie door to allow pet parents to control access to the garden remotely.
Meanwhile Caterpillar – a manufacturer of construction and mining equipment since 1925 – has invested heavily in the experience for its B2B customers. It deploys telematics — the intersection of telecommunications, transportation and computer science – to empower customers with predictive analytics; employs customer champions throughout the business; and has transformed the dealership and e-commerce experience with the customer in mind, with more transparent pricing and an environment more consistent with B2C retail.
If long-term success – and survival – is dependent on nimble pivoting and bringing customer-centric digital products to market in new business models, then B2B businesses also need to think differently about how they maximise the value of these investments once launched.
“The road to recovery is paved with data,” says McKinsey senior partner Kate Smaje, adding, “Winning companies are investing in the tech, data, processes, and people to enable speed through better decisions and faster course corrections based on what they learn.”
Vestas, the world’s leading manufacturer of wind turbines, put data and analytics at the heart of their business. They launched an online platform that allows customers to easily access turbine and fleet specific data; used data to digitise what was once a laborious and paper-based manufacturing process; and analyses data from over 35,000 turbines to deliver insights that improve manufacturing, assembly, maintenance and customer service.
Naturally that’s all done at speed. After all, if we’re going to see 20,000 years of progress in the next 100 years, there’s no time to waste…