Every company is a tech company

Knapps

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01, Dec 2016

Technology is spreading into previously remote domains blurring the distinction between tech and non-tech companies. Each company – tech or non-tech – needs to harness the power of technology to survive the rapidly changing landscape. Involvement and investment at the top level, leveraging a wide pool of talent and keeping pace with innovations in technology are the essential ingredients for a successful transition to digital.

What do several non-tech companies have in common?

They are all in the race to embrace and capitalize on technology.

  • Companies across a wide variety of non-technical domains realized that in order to survive, one must go digital.Cloud technologies, big data analytics, and the internet era offer tremendous opportunities that media, retail, healthcare, insurance and other traditionally non-tech companies have begun to explore and embrace.
  • Digital has made reimagining businesses a necessity and every aspect of businesses, be it connecting with customers, working out revenue models, designing processes for the production and distribution of products or chalking out corporate strategies.

Tirrell Payton, Principal at Payton Consulting writes, “When I step foot into a company, one of the first questions I ask leadership is, "What does this company do The normal ones say, "We’re an ecommerce company" or "We are a biotechnology company." The smart ones will say something to the effect of, "We're a technology company that happens to sell health insurance."

Why should even non-tech companies focus on technology?

Technology has seeped into a variety of traditionally non-tech domains such as finance and automobile. Companies based on these and other domains need to grasp and deliver to the rapidly changing landscape.

  • Non-tech companies find themselves competing with tech companies as well. The number of tech startups being acquired by companies based on domains of automobile, retail, health, agriculture, financial services and other industries is proof.
  • Some examples include Monsanto’s acquisition of Climate Corporation for 1.1 billion dollars – the former is a multinational agricultural biotechnology and chemical corporation while the latter is a big data weather tech company – and Ford Motors acquisition of Livio Radio, a startup focusing on in-car music apps.

Exitround, a website launched in 2013 to connect startups anonymously to acquirers found a huge influx of non-tech corporate acquirers seeking to tap technology startups relevant to their industry.

  • Our global digital economy has led to a thinning and even removal of boundaries between tech and non-tech industries. As EY Global Technology Industry Leader Pat Hyek says, “It’s going to continue to become more and more challenging to define what a tech company is and what is an industrial manufacturer, or a retailer or any other type of enterprise.”

When do companies fail to build a technology-driven culture?

Hiring the most talented people is the primary concern for most of the Fortune 500 companies. Some companies try to woo talented engineers with the wrong lures. When this happens, the tech-driven culture collapses.

  • Non-technology companies seeking to transition must note that technology must be a central tenet of the company culture. They should analyze the needs of their prospective employees keeping this central tenet in mind. But according to Stack Overflow CEO Joel Spolsky, even most software companies fail to do so.

  • Spolsky observes that companies in tune with the needs of developers offer facilities such as private offices or accommodate work from home employees.This is because they understand their developers need to make use of their precious time to concentrate. Surprisingly only a handful of companies such as Microsoft have got these policies in place.

  • He pointed to Facebook’s developer hub – an 8-acre open room – as an example of bad judgment as it provided a chaotic environment which is very undesirable for developers. He said the enormous salary offered at Facebook in relation to its competitors and counterparts was a sign that developers were hesitant to work there.
  • He highlighted the uselessness of emphasizing on luxury packages like free food and spas to draw employees. He asserted, If you want to attract and keep developers, don’t emphasize ping-pong tables, lounges, fire pits and chocolate fountains”.

Spolsky says one way for a company to build a sustainable community of developers is to appoint a leader who is a developer herself.

Where are the positive examples?

Understanding the power of technology

  • Goldman Sachs’s tech team strength, proportional to the rest of the organization is said to be the largest in the banking industry. It has made phenomenal investments in technology include the development of Symphony, a messaging platform to compete with Bloomberg LP’s services. The organization has more members in its tech team than Facebook. This is a reflection of the increasingly adopted view among investment banks of technology as a means of security and infrastructure.
  • Ford Motors has explicitly displayed its conviction about an autonomous future. The CEO Mark Fields has described Ford’s change in transition style as proceeding in incremental steps by making advancements in driver assist technology four years ago – as most automakers do today – to creating a “top down” engineering program to deliver fully autonomous vehicles and the associated mobility solutions and business opportunities.

Striving for a developer friendly culture

  • WalmartLabs released its application platform Electrode under an open source license to establish a mutually beneficial relationship with the developer community.

Who have set a stunning precedent?

  • Henry Schein Inc may not be a famous name but it is certainly an esteemed one. A distributor of health care products and services, it is placed in the Fortune 500 list. Starting off by branding software packages to handle basic accounting and servicing customers, acquisition of tech company Dentrix and appointment of its founder as their CTO, and a revamp of the sales force made Henry Schein a one-stop platform for dentists. The CEO Stanley Bergman remains cautious about introducing new technology and considers the company a service provider. But this has not stopped the company from being one of the successful pioneers in establishing a platform for digital dentistry.
  • GE is harnessing the concept of big data as Lorenzo Simonelli, head of its oil and gas business believes data drives “the next generation of productivity” for its customers. From basic applications such as detecting leaks, broken valves and other damage by using sensors on pipelines, the company is set to move to the next stage. This is to create a digital replica of most of its equipments to greatly enhance productivity and provide a wealth of information for product improvements. The partnership between Bill Ruh, CEO of GE Digital and GE CEO Jeff Immelt made the digital transformation successful.

How can non-tech entrepreneurs strike gold?

Pandora, Getaround, Coffee Meets Bagel and NerdWallet are some successful startup ventures by non-technical entrepreneurs.

Rob Biederman, co-founder of Catalant Technologies explores how such startups succeed in a Fortune article.

  • Make sure the idea caters to a relevant need of the target audience. By picking out what this audience lacks and working out the opportunities you establish a strong base offline to build on. At this stage the technical hurdles should not clutter the mind; the focus should be on how the idea effectively the idea is driven by demand.
  • Once research proves the idea has potential, outsourcing the technology solution at the first stage is cost effective and lets the entrepreneurs invest in their marketing skills. While outsourcing is great in the initial stages, depending on it for too long would be disastrous – the technology updates will not be fast enough and being perceived as slow is beginning to sink. Bringing on a tech expert on board is a worthy investment that must be timely.
  • Constant use and reuse of innovations that spring up every day to facilitate improved customer experience and an open and prepared mind to handle expansion of the business model are necessary to ensure the product remains relevant in speedily changing environment.

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Tags | innovations non-tech tech tech companies