While scanning recent business headlines, innovation-minded CEOs may well feel as if the ground is shifting beneath their feet yet again. From General Motors’ announcement of the upcoming closure of five North American plants—in part mirroring an evolution in consumer demand toward more technologically advanced vehicles—to Apple’s recent iPhone woes, it is clearer than ever that staying profitable while pursuing innovation remains a daunting challenge.
From my own experiences as CEO of a company developing an alternative battery technology that could help advance the burgeoning electric and autonomous vehicle market, several insights have proven valuable:
Quick, nimble and entrepreneurial-minded is crucial. Even if your company is big, it pays to think like a startup. For example, there are plenty of large battery companies that could be rethinking the current lithium-ion standard for electric vehicle batteries, which have proven disadvantageous for several reasons relating to recharge time, safety and recyclability. But they have not done so, in part because the entrepreneurial infrastructure is lacking within many big corporations.
Eliminating this kind of inertia is crucial to survival for companies across many sectors grappling with technologies that are evolving rapidly. CEOs in the tech space may be inspired to look at what is happening at the cutting edge of their own space and decide that innovation must supersede traditional work patterns. Large manufacturers like GM may be learning this the hard way as consumer tastes change, and where markets have yet to come to their full fruition. Meanwhile, CEOs of smaller companies may have more leeway to focus their teams’ efforts on transformative technology.
Tomorrow will be nothing at all like today. Due to the coming era of autonomous and electric vehicles, my newborn grandson may never need to learn to drive. He may never own a car. He may never ride in anything that is not propelled by electricity. In short, his world may be totally different from the one in which we’ve all grown up. This is a key realization for CEOs grappling with the innovation that is sweeping their respective sectors: it is wise to prepare for a radically transformed world.
Keep in mind that the first iPhone was introduced only 12 years ago—and how the smartphone era has changed how we work and interact with each other. Once-dominant brands like Nokia have lost out while other more nimble players have stepped in to take their place. It stands to reason that similar changes are due to sweep the automotive industry as electric vehicle technology reduces its costs and continues to be refined. Forget what you know! Embrace and develop new ideas!
Expect new competitors you’ve never heard of—and others you already know. The advent of disruptive technologies won’t just reshuffle who’s on top among existing companies; they allow new entrants to come into the market as well. For automotive industry CEOs attuned to the incipient electric vehicle revolution, this means paying less attention to what Elon Musk and Tesla are doing today and paying more attention to brands that are currently active in regions of the world such as China and India yet largely unknown in the West. Because their current markets are so large, they have not yet had to sell vehicles outside their own territory—but that is likely to change, and when it does, expect their products to be sold at significantly lower prices. At the same time, some very familiar names—like Apple and Google—may also decide the time is right to venture into the electric and autonomous vehicle space, and when they do, their clout will shake up the field further.
Innovation appeals to all ages. Some CEOs in the automotive space, looking at the incipient electric and autonomous vehicle revolution, might be tempted to market their future wares primarily to younger consumers. And it is true that for young people challenged by the cost of insurance and other factors, reasonably priced electric vehicles will offer great appeal. The era in which people stay loyal to one particular brand, in the automotive sector as in every other sector currently being impacted by waves of technological innovation, is drawing to a close. But it is also true that a world in which electric and autonomous vehicles are commonplace will appeal to older segments of the population. Imagine, for example, how retirement communities could be transformed once its residents are capable of traveling to their destinations via autonomous vehicle. Similarly, future population shifts into urban centers are likely to open up new markets for innovative vehicle technology that offer an attractive alternative to current transit options.
Attention to these four precepts may help CEOs in any sector navigate what is shaping up to be a turbulent and uncertain era—one in which disruptive technologies can either propel a business forward or help sink it.
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