As the adage says: you win some, you lose some. It is the nature of business to win big and lose little; to manage risk while maximising opportunity at minimal cost.
In this era of Business 4.0, where cloud computing, artificial intelligence (AI), big data and the Internet of Things converge to present new opportunities of a magnitude never seen before, this mentality will have to change.
Business 4.0 will only be as revolutionary as its leaders. New opportunities can only be grasped if companies also change – their business models, their cultures, their ways of working and – most crucially – their approach to risk. Or to put it another way, you win some, you ‘learn’ some. A new avenue pursued by a company that hasn’t worked is not a failing, it’s a valuable learning opportunity.
But this is a big challenge for established companies. Embracing risk requires getting rid of the notion that failure is something to be ashamed of and to be avoided at all costs. Companies can’t fully capitalise on the opportunities of Business 4.0 if they are not prepared to step out of their comfort zone. But how can businesses balance the cost of failure against the very real need to achieve a return on investment?
Part of the answer lies in accepting that traditional return on investment (ROI) calculations don’t work when a company is exploring new avenues in which to invest. Rather, the language needs to be couched around whether they have business potential. The nature of exploring new avenues means that it is impossible to tell in advance what will work in the long run – there is only one way of finding out, and it’s a risky one.
Challenging the culture
Even if the C-suite fully embraces this new way of approaching risk, there is still the very real hurdle of how to make sure that change permeates throughout the whole organization. It’s up to the leadership team to transfer their confidence in this brave new world, taking on the role of salesperson, to sell the benefits that embracing risk can bring to the rest of the company.
There is no doubt that some jobs will become obsolete, but companies and their people mustn’t look at this from the perspective of losing something – they are gaining something new and freeing up their workforce to do new things, be more creative and gain more skills. The question to ask is: are workers willing to embrace those changes?
Collaborating more widely
Businesses must also recognize that this brave new world is one spearheaded by collaboration. This also requires a major mindset change – since most corporate cultures are hardwired to work in a very proprietary way. There is a world of answers and solutions well beyond any individual company, and delivering the best results for customers will increasingly mean collaborating with others.
Tata Consultancy Services has been at the forefront of recognising this change in how businesses work and is increasingly sparking conversations between its clients and start-ups, technologies, alliance partners and academia.
Technology is at our fingertips more than ever before, meaning that cost and access are far less of a limiting factor. Business 4.0 is going to force everyone to explore new avenues and leave behind traditional ways of thinking. The success of the likes of Alibaba and Google is – in part – due to the ability of these firms to embrace risk.
Speaking at this year’s TCS Innovation Forum in London, K. Ananth Krishnan, Executive Vice President and Chief Technology Officer of TCS, explained: “Business 4.0 organizations actually embrace risk, with a boldness to take on strategies with risk levels that would have been considered unacceptable just 10 or 20 years back. This new risk threshold has become the table stakes if you want to compete.”
The three core Business 4.0 themes – being agile, embracing risk, and exponential value – will be discussed in depth at TCS Summit Europe 2018, which takes place in Budapest from 26-28 September.