Business insights and growth highlights

Questions Every Small Business Owner Should Ask About Technology Risk

Feb 23, 2022 by Morris Reichman

No longer is technology risk defined as the consequences of technology failure or the potential to disrupt the business. Then what is it?

Are you growing as quickly as you could be?

Business owners are busy. They face tough decisions about where to allocate their precious time and dollars.

Many CEOs occasionally reflect on what might be holding back their growth. Is it product development, marketing, adding salespeople, or their innovation strategy?

At the same time, technology changes so rapidly that staying up-to-date, even in a single industry or market, feels nearly impossible. How can a business remain relevant and competitive in this kind of environment?

Gone are the days when owners felt little pressure to improve a successful product or service. A business could grow by making structural modifications around the edges, pursuing market expansion, premium pricing, or gaining cost leadership. As a result, owners could defer actively seeking real innovation. Today, however, a failure to embrace diverse technologies such as digitization, additive manufacturing, and social media nearly guarantees that competitors will soon leave you behind.

The other challenge to stagnant business thinking comes from startups funded with venture capital not constrained by decades-old processes and practices. These organizations quickly expand by using energetic talent and emerging technology in new ways. These startups may soon take market share and eventually become industry disruptors.

Given these challenges, our job as leaders is to secure the benefits of innovation while reducing the risk around technological disruption.

Competing In A Connected World

Your company is not immune from the threat of another entering your space with radical new ideas.

Nimble competitors may find ways to serve customers better, reduce costs, or eliminate friction in a cumbersome sales process. For example, few individuals post job openings in the newspapers, use third- party travel agents, or make telephone calls using fixed “landlines.” Even the largest corporations may be at risk of disruption from failing to leverage our connected world. According to one estimate, over half of Fortune 500 companies have already closed their doors or were acquired by others in the last dozen years. And half of the remaining businesses may not be around in another five years.

Companies do not easily reinvent themselves or become leading innovators. It takes practice. It must be a multi-year effort involving many people in the organization.

Those best-in-class productivity tools purchased a year or two ago may no longer be the best, but how would you know that unless you were continually looking to innovate?

Taking The Right Risks Around Technology Innovation

Ongoing improvement arising from innovation is not optional. Customers expect us to meet their needs at the time and place of their choosing, not when we think products and services should be available. Intuitively, owners know that inaction is also a risk to their business.

Selecting which innovation projects will deliver services demanded by our customers takes more than performing a discounted cash flow analysis. It requires us to align investments with our most important objectives, including growth.

In McKinsey’s “The Eight Essentials for Innovation,” the authors suggest owners ask themselves questions to determine whether the right building blocks are in place. For example, have you developed a thoughtful plan with clear targets to achieve growth through innovation? Does your team have the talent and capability to plan and quickly execute these projects? As their leader, are you providing the team with vision, encouragement, and financial incentives to motivate their creativity?

Your role is to help your organization see that innovation is a discipline. Leaders take care of catalyzing the change. Innovation also comes from ensuring you provide the team with appropriate tools, funding, and ongoing support to help them see new possibilities for your business.

A Flow Of New Ideas

Listening to your customers and competitors will provide many opportunities for enhancing your processes. For example, a growing number of small businesses leverage new services and technology for payroll funding. Ask yourself which technologies will improve customer service, shorten delivery, lower costs, enable operations, or support employee enthusiasm.

In his article, “6 Ways to Stay on Top of Emerging Technology Trends”, author Kim T. discusses building networks to stay abreast of technology trends while investing minimal time. For example, apps like Panda, Pocket, and Feedspot bring together articles and news feeds from hundreds of sources. Industry thought leaders published in TechCrunch and Recode are a great source of insights. Video content on YouTube from Two Minute PapersThe Verge, and WIRED are also available. Lastly, Google Garage training for small businesses is free, and CEO peer groups such as Young Entrepreneur Council (YEC)also can help.

Innovation is a discipline that requires practice. It should be viewed as the foundation on which you grow your company while managing technology risk. To consistently satisfy your customers’ wants and needs, dedicate some time to innovating and creating a steady flow of new ideas for improvement.

Morris Reichman

hello@payrofinance.wpengine.com

Morris Reichman is the founder and CEO of Payro Finance. Former Vice President at Infinity Capital Funding an alternative finance company, Morris possesses a versatile background in the finance industry. Having spent 7+ years working across global macro operations and start up corporate finance Morris's expertise is in business accounting, risk management and investment analysis. Morris founded Payro Finance to support business owners and ensure their business continuity.