If I were to ask you to imagine a tsunami, you’d probably picture a massive wave. That’s not inaccurate; tsunamis start out as tiny ripples in the ocean before they get stronger and eventually grow into something that can have a devastating impact.” In business, spending — and overspending — can be a lot like this. It starts out fairly small and insignificant, until it grows into something you can’t contain. 

This was one of the statements from Matt Lawlor, futurist and business strategist at Futureworld and the keynote speaker at the ITWeb Brainstorm and BCX Enterprise Forum held in Cape Town recently. He said the world of business is set to face more disruption and innovation in the next 20 years than we have seen in the last century. These changes force businesses across all industries to review their strategies and come up with ways to do things differently or run the risk of being left behind.

In 2026, he added, the average tenure of companies on the S&P 500 Index is expected to be around 14 years. To put this in context, in 1965, that number was 33 years; in 1990, it was 20 years, which means that the battle for relevance is well and truly on. Remember that if you are no longer relevant, your customers will shift their attention and loyalty to someone else, said Lawlor. This demands that businesses spend as much time thinking about what they’re going to do as they do reevaluating what is already being done.

“If there are only two things that I want you remember about this presentation – and they might seem a little strange – it’s rocket ships and hotdogs,” said Lawlor.

By rethinking our approach to space travel, Elon Musk’s SpaceX has been able to make real progress in reducing how much space travel costs, he said. “SpaceX has managed to cut the average cost of a rocket launch by focusing attention on identifying the biggest costs associated with launching a rocket into space, which is the cost of building a brand-new rocket for every trip.” Today, SpaceX develop rockets that can be used more than once. “And it backed up this novel concept of making reusable rockets with an extremely tight control on costs,” he said. Where NASA sees a cost overrun of around 90% on an average flight, SpaceX’s cost overrun is just 1.1%.

He went on to highlight Costco, a membership-based wholesale retailer, and its infamous hotdog and soda special. “In the ‘80s, Costco realised that if people are coming into its stores to do some shopping, they’re going to get hungry. So it started selling a hotdog and a refillable soda for $1.50.”

Since launching the promotion about 40 years ago, it hasn’t increased the price of this combo by a single cent, Lawlor said. This is because the hotdog and soda combo has become something Costco does to make the shopping experience more enjoyable. “And, let’s be honest, if you’ve eaten a hotdog and enjoyed a soda, you’re more likely to spend more time in the store and spend more money.”

But how has it managed to keep the price stable? One way is by starting to produce its own hotdogs, rather than buying them from someone else. It also redesigned its food courts to speed up the amount of time it takes to buy a hotdog, which, in turn, lowers servicing costs. “It’s about the hotdog, but it’s also not about the hotdog because to be able to buy this super-cheap hotdog from Costco, you need to be a Costco member, which costs customers an annual membership fee.”

Delivering the event’s second keynote address, Dr Fazlyn Petersen, a senior lecturer in the Department of Information Systems at University of the Western Cape, said you can’t reduce your costs if you don’t understand what your value proposition is and what value you add to your customer. You also need to know what makes you money, she said. “Drawing on Matt’s Costco example, they’re happy to make a loss on their hotdogs because they know that this offering keeps their customers happy, gets more people into their stores, and more people equals more money.” It’s about understanding what your customers want and then spending money on activities that provide the most value to them, Dr Petersen added. This makes it easier to prioritise where you spend your budget.

Pragasen Pather, Sun International Group’s CIO, learnt a lot about strategically allocating budget during Covid. When the country went into lockdown, Sun International was one of the businesses most affected because it couldn’t operate. But rather than giving up, it put several strategies in place to keep the lights on.

Speaking during a panel discussion at the event, Pather said Sun International’s approach to innovation without driving up costs is all about embracing different levels of innovation – incremental innovation, radical innovation and disruptive innovation. “Play the game, win the game, disrupt the game,” he said, noting that all of this is done to increase revenue in different ways. For example, Sun International’s latest disruptive move has been the launch of what Pather terms an “omnichannel gaming experience”, which makes it possible for people to gamble anywhere, online. The easier it is for people to gamble, the more money Sun International makes.

People still think of technology as a competitive advantage, but everyone is doing the same things with technology, he said. The real competitive advantage comes when your tech investments are directed in a way that allows you to improve processes, up efficiency and do something a little differently.

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