No event, methodology, or process commands the same immense influence as technological advancement. Over the past four decades of my career, I’ve watched innovation de-silo and democratize information and erase geographical boundaries. With more teams focused on technology utilization, organizations are pivoting business models and shifting economic participation. Organizational cultures embrace change and adaptation with new ways to participate in the workforce and contribute to growth mindsets.
But for every inspired advancement, there is a challenge presented by technology. No forward step has been replete without disruptions. And in many regards, technology complicated business management processes for organizational leaders.
Benefit: The Pace of Data and Information
Technology advancements and collaboration can happen in a matter of seconds. Companies can conceptualize, plan, and launch initiatives because digital tools execute an idea at a rate that would have been unfathomable even a decade ago. With this rapid pace, project timing and new points of revenue can also quicken.
The pace of collecting data and information from customers is faster through the technology of electronic transfers. Other business functions that benefit from this technology advancement include lowering inventory levels through new and better real-time inventory management systems. Companies can also leverage cashless transactions—suppliers can save by negotiating better terms for faster payment.
Challenge: Brand Differentiation and Customer Loyalty
But as fast as companies can roll out new campaigns and products, technology makes it harder for management to hold the advantage for long. Short-lived momentum is more difficult to maintain in keeping products and brands differentiated and with unique competitive advantages because everything and everyone is on the internet.
Consumers are more picky and able to switch allegiances in a heartbeat. There’s always a new shiny thing, and comparison shopping on the internet offers an endless myriad of options to satisfy every dissatisfaction. The differences and advantages provided by innovation are folded in the same amount of time because of tech’s enablement of competitors. Advantages are worth less.
The Verdict: Be Quicker and More Agile as a Company
When I was CEO at Hertz, we had 3,300 U.S. locations for renting cars, and we were not selling the cars after we rented them over their depreciated life. The idea was to begin using some of these locations to sell cars instead of giving them to the auction houses to sell for us. I hired someone who turned this into one of the most profitable divisions of Hertz, and now they are selling their cars online as well. So we leveraged our infrastructure and hired and recruited the know-how to develop a new business without spending any significant capital. Selling used cars is a mature business model with lots of competitors. Despite this, we created value as a new entrant as people thought they would get a deal from Hertz by buying a used rental that had been serviced regularly and well—we leveraged the 500,000 cars we bought and turned in every year, the number of locations, and the brand.
Everything today is more fluid, so you have to be quicker and more agile as a company. The need for pulsing your customers and competitors more frequently has never been greater. Culture is a good way of dealing with this issue because you can’t replicate culture even with the pace of technology change. “Sticky” loyalty programs have real value for customers’ current and future needs, but companies will have to work harder to keep them differentiated.
