The mergers we’ve seen in the past year should send a clear message to executives in all industries: Innovate or die.
Amazon threw down the gauntlet in 2017, first by acquiring Whole Foods and then by securing pharmacy licenses in a number of states and entering into acquisition talks with pharmaceutical companies Mylan and Sandoz.
With disruptive companies like Amazon clearly looking to shake up other industries, every executive should take steps to prevent being overtaken by the tech wave. Unfortunately, innovation is easier said than done for established, highly regulated industries like manufacturing, oil and gas, and finance.
Taking Tips From Healthcare
Companies doing business under heavy regulation aren’t in a position to implement every passing tech fad. But the slow-moving nature of these industries is precisely why tech innovation holds so much promise: It offers companies a chance to get ahead of the competition. Innovators in manufacturing, for example, are capitalizing on real-time location systems (RTLS) to improve asset management — something only 35 percent of manufacturers were doing in 2017.
Executives have to stay on top of what others in the same field — and those in adjacent fields — are doing. But rather than chase passing trends, you have to be in tune with the long-term direction of your industry. Often, you’ll find that adapting to new tech is what separates the industry leaders from the average players.
Finding the tech gaps among your peers can unveil lucrative opportunities for your company. Consider the oil and gas industry: As alternative energy sources and other technologies challenge the industry, there’s still $3.4 trillion in productive capital costs that Deloitte found was “nearly untouched by existing digital solutions.” The longer these companies wait to adopt new technology, the more they risk being overtaken by tech-savvy alternatives.
For a more successful example in innovation, look to healthcare. The industry has embraced mobile communication: Nearly 80 percent of physicians in a survey said they were using a smartphone in their day-to-day practice. Because of this widespread adoption, patients now have better access to doctors.
In healthcare, one of the world’s most heavily regulated industries, tech innovations are not only helping save lives, but they’re also putting as much as $300 billion up for grabs, according to McKinsey & Company.
4 Ways to Make Your Company More Innovative
When developing an innovation strategy for a heavily regulated business, executives should view technology as a way to ease their burden and position themselves for growth, not acquisition. Get started with these four exercises.
1. Shorten your reaction time to digital disruptors.
Keeping yourself up-to-date on the latest technology is the first step in boosting your innovating abilities. Read about innovative technology in your market — and in other less-regulated industries — and find inspiration in others’ examples. When you know about digital trends in their early stages, you’re more likely to develop creative applications for your business.
2. Look for high-tech partners.
High-tech companies are generally masters of innovation and marketing, but they may be unfamiliar with large-scale production or regulatory compliance. Rather than compete against them, see how you can work together. If a tech company is interested in your industry, forging an equitable partnership early on can help soften any industry disruption that may happen down the road.
3. Examine how you engage with customers.
Often, customers will be the first adapters of new technology in your industry — pay close attention to their needs. Collect data through surveys and feedback forms, and pull insights and analytics from all your digital platforms. Your company should approach customer interactions with the goal of learning more about your target consumers’ behaviors and desires. This will help you anticipate their changing needs.
4. Encourage innovation in your workforce.
Building an innovative workforce from the ground up also takes your input as an executive: According to research by Organic, 62 percent of employees feel the biggest barrier to digital transformation is the lack of a leadership mandate. If you lead by example, demonstrating that you stay on top of trends, your staff will follow. Encourage others to share their insights, and promote involvement in innovative professional development opportunities.
Strict regulatory guidelines or entrenched processes don’t have to hinder innovation. The slow adoption of technology in these industries means that forward-thinking executives have plenty of opportunities to get ahead of the competition. And for those who are slow to adapt, remember that tech is coming for your industry — whether you’re ready or not.