The Internet of Things is becoming a big deal for people in countless professions. It is projected that there will be over 75 billion IoT devices by the year 2025.
The IoT is creating a lot of new changes that we have to prepare for. There are many benefits of living in a much more connected world. However, the IoT is also driving a number of new challenges as well.
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Many companies are going to have to revamp their entire business models in order to deal with the new technological changes brought on by advances in the IoT. The companies that appreciate these changes will have an easier time adapting.
The IoT is Changing the Nature of Business
The IoT has been a buzzword for many people. However, it is having some very real implications in the world of business. Some of the ways that the IoT is changing business include:
- Reducing waste
- Tracking assets more easily
- Reducing downtime
- Improving operational efficiency
All of these benefits sound very promising. However, it is going to upend companies that don’t evolve. These companies are going to have to struggle with reduced competitive advantages and might lose market share if they can’t reduce their price points relative to more efficient competitors.
What happens when a company refuses to adapt to changes brought on by the IoT? We have many examples of companies that refuse to previous changes in the market and eventually collapse because of their persistent attachment to an old-fashioned business model. For instance, Nokia didn’t familiarize itself with market dynamics, didn’t adopt Android, and kept ignoring the importance of software updates. Similarly, Blockbuster refused to go digital and was gradually pushed away by Netflix. Another example is when Blackberry undervalued the arrival of the touchscreen technology and fell behind competitors. These companies jeopardized their survival by not adapting to evolving customer needs. Companies that don’t respond to changes created by the IoT will face similar fates.
Early Greeks termed change as “the only constant” in people’s lives, and modern-day companies aren’t an exception to this proverb. Business owners, leaders, and managers should overcome their shortsightedness and bolster their chances of survival by changing with time. This includes identifying the changes brought on by the IoT. They will have to understand the IoT devices that will be useful to their organization, as well as the structural changes to their company that the IoT itself will create.
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Sure, employees seldom accept change readily and are prone to resist organizational transformations caused by new technological changes. But a leader can manage change by explaining its benefits.
How can your company benefit by adapting to an IoT-driven model?
Back in 2014, Gordon Hui wrote an article in Harvard Business Review about the ways the Internet of Things changes business models. He made some salient points and addressed some of the concerns that companies have to address.
Here are some benefits of adapting to a new business model in an era driven by the IoT.
1. Test your leadership’s ability to handle working in a new environment shaped by the IoT
Many business leaders have a knack for traditional processes. However, they might not know how to deal with a world governed by the IoT.
Business managers should consider change as a test. Can you guide your team through an organizational transformation? Companies need to produce effective change managers to help the workforce become adapted to changes. And digital learning provides a unique opportunity for us.
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Business leaders and managers can now pursue a change management course online to learn how an organization can adapt to changes easily. Such a course allows professionals to remain updated methods to navigate change processes and survive the demands of today’s constantly shifting marketplace. Education can help people boost their expertise and develop the skills needed to run a business in an IoT-led business environment.
2. Enhanced innovation
When companies refuse to change, they’re more likely to lose their customers to those competitors who have embraced newer ideas. Today’s IoT-dependent business models require business owners to become more open to change for fostering innovation and promoting creativity. We have examples of companies such as Ford, where employees embraced wholeheartedly, and the result was astounding! Don’t just stick with a product or practice that may become obsolete in the future.
3. Crisis management
Sometimes, a crisis forces a company to embrace changes and operate differently. Several airlines have changed how they worked after 9/11 to prevent terrorist attacks. The financial disaster of 2008 made the business industry accept that change is imminent. Now, COVID-19 also makes us realize how telecommuting can enhance the workforce’s productivity. A crisis – therefore – often works as a catalyst for change. It makes leaders and employees want to embrace other methods of operation to generate better results.
4. Internal/external pressures
Sometimes, change becomes inevitable for a company. We have examples of IoT innovators such as Apple and Amazon, that bowed before the need to change and survived in this tech-dependent age. These essential internal/external pressures include the below-mentioned factors.
5. Technological evolutions
With increased reliance upon the IoT today, it’s difficult for companies to survive the onslaught of competition without embracing the change. We have seen marketers switching to a personalized approach for targeting customers. Moreover, DDDM (data-driven decision-making) has replaced intuition-based decision-making. Yes, such changes can disrupt the customary functioning of some companies today. But their long-term benefits include bolstered productivity.
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6. Customer demands
Some small-to-mid-sized 40% of businesses call the cashless payment a brick-and-mortar investment for the future.
The concept of contactless transactions made feasible with IoT devices became widespread during the coronavirus pandemic. It allowed people to conduct business without fearing COVID infections. These constantly wavering consumer requirements demand companies alter the way they’re working. Today, people expect your business to remain open 24/7 and accessible with a smartphone. You can’t operate unless you surrender before these demands and accept the change. It helps you survive in the market today.
7. Structural alterations
Mergers & acquisitions force workers to go through some changes. This probably constitutes one of the most challenging incidents of change management for any organization. However, effective leaders can use their skills and acumen to prepare employees for organizational transformations in the future.
8. Growth opportunities
Submitting to the change enables companies to discover better pathways to success while exploring newer avenues in the business world. When employees dislike the concept of change, you can have them undergo training exercises for upskilling. This practice helps workers hone their skills, thereby becoming more open to organizational transformations. Change management experts have noted that providing better educational opportunities prepares the team for change.
9. Better productivity
We’ve discussed how embracing changes can increase your workforce’s productivity. When you feel like the business objectives aren’t being met, adjustments can close the workforce’s performance gaps. That’s how you can eliminate the factors hurting productivity.
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10. Another change
Some companies have to change further to adjust to previous changes. For example, abandoning a product due to customers’ disinterest may motivate your organization to adopt some changes. This change helps employees become familiar with the changes happening in the past. Another CEO who takes over may bring some ideas of their own. These reforms help your company grow today. Don’t be afraid of change; change managers should tell their subordinates. Change is a window to success.
Why do employees often resist change?
Leaders shouldn’t forget that change’s always frightening, and resisting it constitutes normal behavior. It brings uncertainty and forces you out of your little bubble. But business managers often overestimate the workforce’s willingness to evolve. While many employees resist change because of a fear, a survey shows that only 22% want to leave their “comfort zones.” We advise leaders to understand what produces change-resistant employees, as:
- Employees don’t wish to reskill/upskill themselves.
- Employees are irritated by a former change experience.
- Employees are afraid of wandering into uncharted territories.
- Employees are threatened by the possibility of becoming unemployed.
- Employees feel powerless when they’re asked to change the way they operate.
Companies Must Respond to Changes Created by the IoT
You can’t remain old-fashioned in today’s rapidly evolving business world, especially as the IoT drives new changes. We need effective change managers to lead the team across organizational transformations. Unfortunately, 70% of change initiatives fail, and experts have identified resistance caused by cultural inertia as the primary obstacle (46%) to change. Leaders must educate workers about how resistance to change is futile. They should explain the benefits of change to workers to earn their trust.
Now, why is change essential? First, technology’s evolving, and companies must adapt to beat competitors. Today’s customers demand better services and products. Unless you change your business model to meet customers’ expectations, your organization can’t survive in the future. You shouldn’t forget how accepting change leads to improved productivity. Sometimes, internal and external pressure also compels a company to transform how it works to meet customers’ demands globally.