How to prevent your organisation being Uberized: emergency strategies

15 October 2015 -

Right now, someone is trying to disrupt your business and market. You urgently need to start acting like a software company. Here are your guiding principles

Derek Roos, guest blogger

Think AstraZeneca is a pharmaceutical company? Think again.

Sure, the company offers a vast drug portfolio spanning major disease areas such as cancer, cardiovascular, gastrointestinal, infection, neuroscience, respiratory and inflammation, but AstraZeneca CIO David Smoley sees the company in a different light.

Speaking to the Wall Street Journal recently, he said, “In the past, we’ve said we’re a drugs company… but the reality is we are a technology company.”

Smoley is one of a growing number of business leaders who see their industry and their company being transformed by digital technologies. Car companies such as Ford and Tesla sell sophisticated computers on wheels. Technology is so important to shipping company FedEx that its board includes a standalone IT committee.

The application is the business

What these companies have realised is that embracing technology isn’t a matter of choice in today’s digital economy; it’s a matter of survival. Thanks to the rise of cloud computing and mobile devices, the barriers to entry are so low that innovative, fast-moving start-ups are coming out of nowhere and disrupting traditional industries in the blink of an eye.

Uber is the poster child of a disruptive tech company – so much so, that the rallying cry for the insurance industry, at least according to one board member, is to avoid being “uberized”.

This is the heart of the matter: Uber didn’t just introduce a replacement for traditional taxis and limos; it used software in a unique way to collect information and re-think processes that have revolutionised the entire personal transportation industry. In the process, Uber made the customer experience incredibly simple, all managed by a few clicks on the device in your pocket.

As a business leader, you must ask yourself whether your company will be Uber – or uberized? The impetus is on you to drive your organisation to think and act like an innovative, fast-moving start-up. You must make it a strategic priority to use modern application software to innovate and differentiate your company; to do things better, faster and cheaper; and to engage your customers and partners in new and meaningful ways.

In other words, how can you disrupt the status quo and turn your industry, no matter how old or established, on its head? There are no bricks and mortar, no fleet, no factory, no “this is how we do things” to protect – or that will protect you.

Traditional IT departments aren’t fast enough

Make no mistake: it’s hard to act like a software company and innovate as fast as a company like Uber. The business of an organisation is usually pretty good at coming up with new ideas, but often isn’t in synch with IT. IT either says “no” to the project altogether or it can’t keep pace because there aren’t enough resources to deliver what the business needs, as quickly as it needs it. In the end, a lot of great ideas become missed opportunities.

This is happening across industries. A McKinsey study asked close to 1,000 IT leaders whether their IT organisations are faster or more competitive than others in bringing ideas to market. Some 87% thought their companies were slower than the competition. Only 13% thought their organisations were doing well.

Make every employee part of the innovation process

The key to bringing more ideas to market faster isn’t simply a bigger IT department. Instead, you must make software-thinking a defining characteristic of your entire business, not just a separate department. Every employee in your company should be empowered to think and act like they work in a start-up; everyone should be part of the innovation process.

Once you embrace this notion, you’ll be in a much better position to harness everything that’s unique about your company – your people, processes and information – to deliver software that helps continually reinvent your business. Great ideas live in every corner of your organisation. If someone in marketing or finance or HR has an idea for a new application, they should have a way to pursue it.

That’s not to say I’m expecting everybody in a company to start building their own apps. I’m simply suggesting a new way of thinking about software development that unleashes the creativity of your entire workforce. To create an environment that fosters innovation, though, IT must evolve from a service provider to a business enabler. This requires abandoning the traditional view of IT as a centralised function and instead providing the business with tools, frameworks and best practices to build applications themselves – or at least more directly participate in development projects.

Just a few years ago, most companies weren’t thinking about IT like this. They were focused on efficiency and cost reduction. Since then, the role of IT has changed – fundamentally – and businesses are recognising the need to act fast, and use apps to drive growth, differentiation and innovation.

Uber, Airbnb and others have proven that organisations can be innovative and disrupt markets by putting software at the heart of their business and making it the differentiating factor. In today’s world, the ones that throw the traditional playbook out the window and turn their companies inside out will be the leaders of tomorrow.

Now is the time to start running your company like a software company.

Derek Roos is the CEO and co-founder of Mendix, where he leads a pioneering team of software industry experts with the mission of bridging the gap between business and IT, making application delivery dramatically faster, easier and more collaborative