It's dangerous to ignore technological changes when making strategic decisions for your business. At best, you may miss opportunities; at worst, you may lose out to more tech-savvy competitors. It's just as dangerous to pin all your future plans on current or upcoming technology -- you can wind up spending more than you can afford on technology you don't really need.
Finding the right balance between these two extremes is one of the biggest challenges you will face running a business. There are no easy answers. But here are some practices that may help:
Bring IT to the table from the start. 'Technology has become completely integrated in the daily existence of small business,' notes Ken Pfeiffer, Chief Technology Officer (CTO) of Blue Sky Factory, an e-mail marketing company. 'So it's essential to coordinate future growth with competent IT professionals.'
For example, he says, imagine you're planning 65 percent growth in the coming quarter. 'But what if you are already using 80 percent of your available bandwidth? That planned growth will cause the business to come to a grinding halt, and the disruption could cost you customers and revenue.'
To avoid embarrassments like these, it's wise to have a top manager from your company's IT department at all your strategic planning meetings. He or she may be able to alert you to new opportunities as well -- for instance, perhaps there's a new distribution channel available that you don't know about yet.
But this doesn't mean you should depend on your technology team to help you determine what your strategy will be. 'First business leaders must define their short-, medium- and long-term goals,' Pfeiffer says. 'If they can't, then no IT group can be truly successful.'
Think CIO and CTO. Your business may not be big enough to include a lot of C-level executives. But whether or not you actually have both positions, you'll handle technology better if you stay aware of the distinction between the technology your company uses internally, typically overseen by a CIO, and technology used to sell or deliver your product to customers, which is typically the province of a CTO.
'A lot of companies focus on technology for internal operations, and then look at technology for products and services, the same way,' says Adrian Ott, CEO of Exponential Edge, Inc., a strategy consulting firm. 'That's a poor strategy.'
Traditionally, she says, IT departments select products based on cost, functionality, and quality. 'So when business leaders throw a project over the wall and ask the IT department to help select technology for delivering or marketing products to customers, they use those same criteria. Instead, they should be asking questions like: ‘What kind of technology are our customers already using? What kind of go-to-market partner will the technology provider be?' Just picking the best technology might not be good enough.'
Prepare for rapid change. You may think you've seen technology advance at breakneck speed over the last decade. But, says Jack Uldrich, author of Jump the Curve: 50 Essential Strategies to Help Your Company Stay Ahead of Emerging Technologies (Platinum Press 2008), things only get faster from here. 'People are familiar with Moore's Law, and they may be aware that robotics and nanotechnology are advancing,' he says. 'But they may not realize these technologies are growing at an exponential, not linear, rate. The curve for technological advances will begin shooting straight up between 2007 and 2010.' For instance, he notes, just a couple of years ago, nanotechnology seemed like something futuristic and esoteric. Now it's routinely used to make stain-resistant pants.
How exactly do you get ready for rapid change? Uldrich points out that the technologies changing the shape of business today have been around for a while; it's their adoption, affordability and influence that have grown. Similarly, a lot of tomorrow's most influential technologies are already around today, he says. 'So your first strategy is to really be looking for these things.'
He advises using a sometimes-overlooked resource for technology innovation: the people who work for you. 'One of the best ways to tap into innovation is to ask people for it,' he says. With that in mind, it might make sense to hire some employees who may not fit the usual business mold, but might help you see over the technological horizon.
'I'm a proponent of hiring at least one or two people who are outside your comfort zone,' Uldrich says. 'They will be on the cutting edge of these advances. And they may see opportunities and threats sooner than other people will.'