This article is the second of a series sponsored by PNC Bank. Over the coming months, we’ll be engaging with CEOs from around the U.S. on some of the most important topics facing business leaders today. Click here for part 1 and part 3.
CEOs and their advisors seem to be unanimous in at least one thing these days: they mention technological disruption as the biggest factor that can bring unprecedented opportunity to companies — or epochal calamity – depending on how they handle it.
But too often the tech discussion gets stuck on that second part, hand-wringing over digitally savvy rivals—especially Amazon. Lost is the incredible potential of technology to turn small and middle-market companies into true giant killers. Successful leaders are creating market-changing edges for their companies, regardless of size, thanks to transformational tech—especially the potent combination of big data and machine learning to understand and serve their customers like never before.
Here’s a glimpse into how three middle-market CEOs—from three very different industries—are harnessing technological change:
Barry Myers, CEO, AccuWeather
Myers and his brother Joel Myers, chairman, built their State College, Pa.-based weather-forecasting company by sifting and packaging the massive amounts of data that are created by government and private sources of weather information, from satellites to aircraft. Now “we have more data coming into our main corporate facility than there is coming into any other single place on earth,” Barry Myers said.
AccuWeather became a leader in providing precise weather information on mobile phones more than a decade ago, including establishing and communicating customer-privacy parameters that lead the industry. Myers said AccuWeather must maintain and leverage that position to retain value in crucial proprietary products such as Minute Care, which “works on your precise longitude and latitude to tell you whether, within the next two hours, rain is going to begin at any given minute.”
Virtual reality also provides potential for AccuWeather to differentiate itself in the next few years, Myers said. “We’re already doing things that are on the cusp of providing virtual reality, such as sending storm chasers out with 360-degree cameras,” he explained. “You can use your iPhone or Android to actually pan the scene, which is really exciting with weather. It’s unique to see those kinds of things in real time.”
Next, AccuWeather plans “to bleed that into VR” to create more proprietary value for its customers. How exactly? “We can’t,” Myers said, “give away the store.”
Steve Sashen, CEO, Xero Footwear
If there’s any business that seems prime for disruption by 3-D printing, also known as “additive manufacturing,” it should be footwear. Presumably, consumers would love to get shoes made quickly to the exact contours of their individual feet. And shouldn’t that be a priority of a company that makes minimalist, flexible sandals and lightweight footwear like Xero?
No, Sashen insisted, because “it would take an astronomical leap for 3-D printing of footwear to be something that could be done at scale,” in part because the materials – think everything from high-performance polyurethane to synthetic leathers – are far from ready for prime time. Plus, he said, humans don’t actually like shoes that are designed specifically for their feet. “Just like Goldilocks,” Sashen said.
Instead, Sashen is trying to keep Xero ahead of the game and create unique value for the company by leveraging two different areas of technology. He’s pushing the envelope on e-commerce because he’s determined to expand Xero distribution profitably online, and to exploit digital customer leads, rather than turn to traditional retail distribution.
And given that Xero’s customers tend to be runners, walkers and others who are very serious about their footwear, Sashen is advancing his understanding of biofeedback using miniaturized electronics that are embedded in footwear – akin to the physiological information that Fitbit and similar products deliver via the wrist.
“We need to figure out how to measure and deliver the right information in the right away and at the right time to create learning, not, ‘We’ve analyzed your run and you can look at this information an hour after you’ve finished it,’” he said. “We want to use it to speed up the adoption of minimalist footwear. We’re just not sure how we’re going to do it yet.”
Richard Dix, Chairman and CEO, Winchester Carlisle Cos.
The Dallas-based home builder is trying to stay ahead of a torrid market by using technology to disintermediate and disrupt both processes and people.
The people part comes in eliminating the middlemen who sell Winchester Carlisle homes and mortgages, and so on. “You’ve got 10 percent of the transaction price today that’s going to people involved in the process, and when you look at margin compression in our business, that’s a large target area,” Dix said. “We need to do what Amazon did to retailers.”
So, for instance, Winchester Carlisle is harnessing machine learning to understand more about its customers, individually and collectively, for targeted marketing. And the company has deployed “self-locks” on its speculation homes that allow consumers to tour a home themselves after getting a code from the company, instead of having to schedule a time for a rep to take them through.
“They’re determining what they think of our products without ever interacting with us,” Dix said. “Then our online sales team can reach out to them.”
Also, Winchester Carlisle is implementing manufacturing technology for doing more pre-assembly of home components and systems at its factories instead of using the traditional on-site method.
“The number of man-hours we waste throughout the construction process is still enormous, and in waiting for on-site inspections” by regulators, he said. “But actually our biggest challenge in doing this is the municipality, not the consumer. We need to educate them on how we can build an equally beautiful product in a factory environment.”
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