What are best practices to leapfrog your competition in your industry? Look outside

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Fundamental forces are changing how we view business. These forces mean future outcomes are less certain. There is more competition and more ways to assemble winning teams and winning business models, but fewer certainties about what will deliver success. In this episode of the Boardroom Advisory Series, we talk about how to leapfrog the competition through learning what other industries are doing to be successful. Watch the preview here:

Disruption has become the standard, in 2017, in 2018, and will continue in the foreseeable future. This means established beliefs and concepts are challenged with new and different ideas that previously would never be considered or implemented, creating uncertainty and unpredictability in business. With less predictability, we are subject to fewer constraints but open to more opportunities. These uncommon approaches in business opens the door to more risk as well. The opportunities are infinite, provided you can manage the risks. The increased business risks and opportunities that are greater today are because of these three forces:

  1. Intangibles matter more than tangibles. Business models continue to be under pressure. In 1978, book value comprised 95% of market value on average. Today it accounts for less than 20%. The remaining 80% derives from assets that don’t appear on balance sheets: knowledge, brands, people, and relationships. Increasing reliance on these assets that are intangible means your organization’s value is more volatile and more at risk. Learn how to manage your intangibles.
  2. We are in an ongoing war for talent. Your employees don’t appear in your books but that doesn’t stop competitors from trying to steal them. People who bring knowledge, creativity and innovation to your business are always at a premium, so look after your employees or they will desert you. Human capital may be your greatest asset and also your greatest risk.
  3. Technology is rapidly accelerating the pace of change. Technology changes the risk profile of every organization by increasing the availability of information and creating new opportunities for employees, customers, and investors to explore. Transaction costs are decreasing and loyalty is an endangered species. Old intermediaries are being bypassed and new ones are constantly emerging. Technology is turning traditional assumptions upside down, creating new uncertainties and new risks/opportunities. On an ongoing and incessant basis. Get used to it.

In these perilous times, use disruption and uncertainty to your advantage and to differentiate yourself from your competitors, who may be stuck in their old hat and conventional philosophies. Don’t be afraid to take risks, but make wise and informed decisions.

Watch the entire Boardroom Advisory Series from IBM here.

Global Banking and Financial Markets Leader, IBM Institute for Business Value

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