In my previous essay on the importance of Corporate Entrepreneurship in today’s tumultuous environment, I introduced the concept of “punctuated equilibrium”. I explained that, just like in the time of the dinosaurs, exogenous factors, such as an asteroid striking the earth, can abruptly change the status quo of an entire ecosystem. When such sudden and powerful forces occur, there will inevitably be survivors who are able to adapt to the change and there will be those who go extinct because of an inability to cope with a new world order.
Today, we are faced with our own punctuated equilibrium brought on by a global pandemic, a change in climatic conditions, a new social consciousness towards diversity, equity and inclusion and intensified political discord. Each of these biological, environmental, social and political forces are having a profound impact on our collective behavior patterns. As a “new normal” begins to emerge from the chaos resulting from these forces, companies of differing sizes and across many industries are struggling to find ways to meet the changing needs of their target market constituents.
Another set of forces contributing to the changing societal landscape, is the rapid emergence of new technologies collectively known as the “Fourth Industrial Revolution” or “Industry 4.0”. Tools such as advanced video conferencing, artificial intelligence, virtual and augmented reality, robotics and gene manipulation, are rapidly diffusing into company business models and consumer and industrial products. When used appropriately and ethically, these technologies have the potential to enable companies to deepen their engagement with existing customers, while also enabling them to extend their reach to satisfy the changing needs of new customer segments.
When companies are able to meet the needs of their target market customers through their product and service offerings, they begin to optimize their business models and resulting processes in order to achieve economies of scale. But optimized business models and processes can sometimes be a detriment when customers change their behaviors and resulting needs and desires. In an emerging ‘new normal” environment, characterized by social distancing, remote work, and home shopping, the change in market behavior can be profound. As such, companies ill-equipped to deal with such changes are vulnerable to suffering the consequences. But companies who are astute and nimble enough to recognize and adapt to trends associated with changing behavior patterns can not only survive, but prosper.
Industry 4.0 technologies can represent a major catalyst for enabling such adaptation to happen. As the pandemic continues to proliferate, abrupt and severe weather patterns continue to wreak havoc, societal demands for equitable inclusion increase and political distances widen, companies must rethink their approaches to how they compete for a customer’s attention and how they maintain an active and engaged workforce. These challenges will require companies to reimagine their business practices and approaches to competing in the market. Accordingly, the time is ripe for corporate entrepreneurs to initiate such change within their own organizations. But it will not be easy. Companies steeped in traditional ways of operating and wedded to inflexible and application specific technologies and processes will have a tendency to resist the need for change. But the challenge is out there. A new normal has already begun to take hold. Who will survive and who will prosper and who will suffer the fate of extinction will depend upon a company’s ability to embrace this tidal wave of change.
Alex F. DeNoble, Ph.D
Executive Director, Lavin Entrepreneurship Center
San Diego State University