The 2 words that strike fear into the hearts of many executives are ‘digital disruption’. And for a good reason. Digital disruption has lead to the downfall of businesses, which until a few years ago, were successful. It has left a trail of debris of bankrupt Blockbusters, angry taxi drivers, and empty malls. And if you think you are safe, forget it.
Of today’s leading brands, 75% will not exist anymore within a decade, according to research by professor Richard Foster of Yale University. They will be replaced by new firms. A wave of disruption is coming for your industry. Instead of being wiped out by it, let us show you how to ride these waves of digital disruption to success.
Instead of waiting, start preparing and get innovative. Let management think about how your business can be disrupted. Think outside of existing business models, your current markets and the ways in which you are operating. Dismiss any assumptions you have about your industry, market, and customers. Start thinking like a disruptor.
Once you discover how disruption can hit your shores, you’ll start doing some disrupting yourself. By for example:
Even disruptors disrupt themselves. Netflix started with sending DVDs by mail to people’s homes. Yet, it completely disrupted itself when it switched to online streaming. Go and disrupt yourself.
History is full of examples of businesses who underestimated the arrival of new technology. Take Nokia when Apple was developing the iPhone. Nokia’s Chief Strategy Officer Anssi Vanjoki said the following in an interview: “The development of mobile phones will be similar to PCs. Even with the Mac, Apple has attracted much attention at first, but they have remained a niche manufacturer. That will be on mobile phones as well.” We all know what happened. Never underestimate a possible disruptor. Don’t ever be a Nokia.
There is a reason your disruptive competitor started its business. It sees market potential by being smarter and turning things upside down. The fact that there is a disruptor in your industry means your ways are outdated. You need to figure out new ones, now. Start by studying your competitor and doing away with an incumbents arrogance. Don’t hesitate to copy their business model if needed; imitation is the sincerest form of flattery after all.
Digital disruption comes at you at a breakneck speed. And speed is what you need to navigate the waters. Become more like a startup. Move away from long planning and execution phases. Nurture a company culture where people experiment and new ideas are instantly tried and tested. Develop and invest in digital technologies which enable this.
Take calculated risks and start small-scale trials. Learning from and rewarding these. Don’t be afraid to fail but understand why, make modifications accordingly, and test again and get to the right solution. Or kill the project. You’ll sooner discover what works and what doesn’t. Process all the feedback. By testing new ideas now, gathering data, and doing lots of analytics, you’ll be more flexible and innovate quicker.
The most successful disruptors offer services at a better price. Look at Uber and how it undercut the prices of traditional taxis. For IKEA, lower pricing is an integral part of their product design. If the price is too high, the designer has to return to the drawing board. Make better pricing part of your DNA. Keep on testing and trying until your price is better than that of your competitors.
To foster an environment of creativity and experimentation, destroy the walls between your departments. You want a solution which is technologically possible, strategically sound and something your customer wants. Have diverse teams of, for example, marketers, software developers, sociologists and logistic managers, to develop together. Involve people from all levels so that there is the ability to enact change. Nurture both a detailed view and a helicopter view. These 2 visions should directly interact and feed off each other.
To make this all happen, you need to hire people from all walks of life. People who are open to new ideas and know how to collaborate with others, but aren’t afraid to speak their mind. And if you see that your business lacks certain talents, fill the gap by attracting new people.
The digital revolution has made it much easier for companies to interact and listen to their customers. Collect data from these interactions, analyze it and act on it. Teach all your employees, from your CEO to your mailroom clerk, how essential data is, how to collect it, read it and use it. Make sure you not only collect a lot of data but that you collect the right data. Define your various objectives. For example, do you want to:
Unify the data coming in from sales, marketing, logistics, social media and other customer touchpoints, and make sense of it. By using advanced analytics, you’ll better understand your customer, their needs and anticipate them. Knowing what your customers want before they do, is the goal.
The waves and the currents of the sea change continuously, so do your customers preferences. To notice these often subtle changes, give your customers lots of opportunities to interact with you. You want to have an omnichannel presence. Integrate your app, real-life shopping experience, customer service and social media in such a way they are easy to navigate and move between them.
When customers take time to give you feedback, this is an opportunity to innovate. Use an automated closed-loop feedback system. A version of this:
From now on, you’ll act on feedback and use it to improve, not only your customer’s experience, but also to innovate your company, products, and its services.
Don’t stand on the beach, looking at those big waves rolling in. Grab your surfboard, and start riding the waves of digital disruption. Get in touch with us now.