In the latest issue of Harvard Business Review* Martin Reeves and Mike Deimler argue that a new source of competitive advantage is a company’s ability to quickly adapt to rapidly changing and turbulent markets. They say “in a world of constant change the spoils go to the nimble”. Building a company ecosystem that supports and nourishes adaptability is therefore crucial. They identify key skills of:
1. Ability to read and act on signals – this is the skill of identifying external changes, quickly and accurately determining their impact and responding before competitors do
2. Ability to experiment - experimentation, rapid prototyping, small scale trials, simulations and rapid scenario building are the tool box of adaptability
3. Ability to manage complex multi-company systems – partnering with other businesses can increase flexibility and speed to market
4. Ability to mobilize – take the successful small scale experiments and make them global quickly
While the authors do not stress the point, IT has a critical role in enabling all of these abilities (if you don’t use it effectively your competitors will). The challenge is to sell to management the acceptance of high level IT principles that acknowledge and support IT’s critical role in supporting organisational adaptability. CIO’s also have a responsibility to add adaptability to their fundamental design and to manage the trade-off with the traditional IT design principles of predictability and reliability, it is time to stop being IT accountants and become IT business developers.
* Reeves, M. & Deimler, M., 2011, “Adaptability: The New Competitive Advantage”, Harvard Business Review, July-August 2011, p. 135-141.
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