Automation, artificial intelligence, 3D printing…these and other technological advancements are disrupting, or about to disrupt, just about every industry known today. All of them. It's the nature of our innovative economy and it's really kinda fun...if you pay attention, take the time to think strategically about your organization, and prepare for what's coming.
Essentially, that's the work of strategic management. Given the gathering storm of technology innovation, we would all do well to hone our strategic thinking skills, lifting our heads from the day-to-day to assess the external environment, take a hard look inside our organizations, and think through how we might overcome challenges and create new value in the market.
Jared Moore, founder of Avadi Dental Labs, has been paying pretty close attention to the impact of technology on a market you probably don’t think much about.
“We make teeth. Mostly fixed prosthesis,” he said. “When we first got into the industry we took notice because 80% of the industry was comprised of companies that do less than half a million dollars a year. There was heavy fragmentation and lots of mom and pops.”
But that’s not the most interesting part…
“A lot of technology was about to hit the industry,” he said.
3D modeling and printing have found their way into your dentist’s office, potentially reducing the cost of things like fixed prosthetics. But this new technology represents an eroding factor for mom and pop businesses that cannot keep up with technology. And, as is generally the case, the eroding factor for those mom and pops presented an opportunity for Avadi Dental Labs.
“Our goal was to get big quickly so the first thing we did was adopt the 3D technology,” he said.
Jared grew his company, acquiring the technology and human resources needed to compete in the transforming dental prosthetics market. Avadi had grown to 45 employees and invested significantly in technology when I sent him an advanced copy of “Think Beyond Value: Building Strategy to Win.”
“It’s funny, you go through all of that stuff in school and you know it but then you get into your business and you’re so buried inside that you forget to look outside. It was really good to start thinking again through that simplified process of V-REEL,” he said.
The V-REEL Framework helps users think through how they can become valuable and rare in the marketplace, establish distinctive competencies, and sustain them over time. Jared used the framework to identify where the real value creation might come from at Avadi and in doing so he was able to recognize some eroding factors that needed to be addressed.
“Understanding how we can bring value and have rareness so we can have true distinctive competencies in our industry was the focal point for me,” Jared explained. “From the very beginning we understood that if our service was better than anyone else’s, we would be able to thrive.”
Jared used the simple language of V-REEL (Value, Rareness, Eroding factors, Enabling factors, and Longevity) to help his team at Avadi understand where their real value comes from and what eroding factors might come along to destroy value.
"When you're talking strategy, it can be a very overwhelming topic but with V-REEL in these meetings it was just very simple," he said, "All the sudden my team was realizing that we're not any different than anybody else. The common language helped everyone understand all the way to the ground level."
Jared and his team acknowledged that others were going to figure out the technology the same way Avadi had, so new entrants in the market would come along and erode the company’s ability to create value. After thinking through V-REEL, they further acknowledged that any failures in customer service presented another significant eroding factor.
“From the very beginning we focused on consistency in quality, communication, and timeliness, but I looked at those three things and decided none of them on their own are particularly rare,” he said.
Jared recognized that by putting together key resources and capabilities and weaving them together, he might just form something truly distinctive in his market. In my book, “Think Beyond Value: Building Strategy to Win,” I talk about competency bundles and how they can help you create real value in the market.
Jared has Avadi Dental keenly focused on creating a competency bundle. As a result, they are positioning the company to do well in what will, no doubt, become a competitive market. Just like yours.
Listen to the podcast, "Thinking Beyond: Conversations with Strategic Thinkers" for more insights on how to survive the coming wave of technological change, and...keep thinking!
Posted on Thu, February 1, 2018
by David Flint