There
is great wisdom in learning from our failures, yet there are not too many
businesses that can actually do that well.
It is essential that businesses learn from their failures in an effort
to improve future performance, however, many businesses do not seem to
implement strategies for real change.
There are several businesses that had good strategies in place, but they
failed to stay operational due to unforeseen circumstances. For example, Tower Record was a music store
that was primarily based in California. Tower
Records allowed its customers to access their favorite music by simply taking a
trip to their record store. Whenever you
hear the name Tower Records you associated it with buying music. At its peak, the company operated over 200
stores in 15 different countries. The
company reported a net income of $1 billion in 1999. However, in 2006 the company filed for
bankruptcy. The company had expanded
very quickly and had to compete with smaller record shops that were selling
music at half price. As online music purchases
advanced with technology, more companies started selling music online. MP3 players began to appear on the market,
and then the iPod was introduced, and this completely changed the industry. The evolution of online music sales also led
to piracy and Tower Records was not spared, illegal music was being made
available for free almost everywhere.
This drastically decreased their sale and ultimately led to the
company’s demise. Even businesses that
start off with a well-thought-out plan can fail if they do not stay modernized
and adapt to changing strategies.
It is essential for businesses to forecast
change and vision their future state and engage in scenario planning. Businesses have to be prepared for the
changes that lie ahead. Businesses need
to anticipate change and be prepared to handle it. They must have a team that is consistently
doing trade studies and continuously observing the market to stay on top of
what the next hottest thing may be. Therefore,
making companies more adaptable will help companies to have continued success
despite the impediments that they may be forced to encounter along the way.
Customers contribute to the design of
sociotechnical systems because they provide key feedback on how to implement
continuous adaptations and system improvements in collaboration with the system
developers (Carayon, 2006). This is important because sociotechnical is
about connecting society with technology.
Sociotechnical refers to the connection of social awareness and the
technical aspects of an organization. It
is all about technical performance and the quality that it brings to people’s
lives.
There
is always an economic impact that has to be considered as well. In order to remain competitive and to compete
with prices, companies will need to consider offering memberships and plans
that will allow customers to receive enhanced perks and rewards with continued
membership and a promise that the company will always offer the latest convenience
in technology and the best social platform to deliver the service for their
needs. Another force to consider is political
impacts, which can drive new policies and laws.
This is also what impacted Tower Records, at the time there were
different laws on piracy and now those have changed, and music can be sold
online and even shared.
It
is important to ensure that your systems can interact and behave well with
human interaction, businesses are implementing a more holistic approach. It is important to evaluate the entire sociotechnical
system to avoid any potential impacts which make it easier to evolve and
respond to change. Having a sociotechnical
plan is an effective way to bring technology and people together while managing
risk and improving the human experience with the latest technology.
References
Carayon, P. (2006). Human factors of complex
sociotechnical systems. Applied
ergonomics, 37(4), 525-535.
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