‘Companies today have one of two
choices, Disrupt or be Disrupted’
If you were born between 1980 to
1990 then this new digital world is not entirely new to you. If you were born
before 1980 you had to grow into this digital world and if you were born before
1970 then unless you are deeply connected to IT and technology the picture
above might even be a little difficult to comprehend. You had
to possibly fight your natural instincts before approving things that you
could not grasp easily. You had grown on the hard-copy days. The
other people who adapted are ones with kids and grand-kids for
these generations rapidly exposed their older generations to the
transformations taking place all around which we refer to as the new Digital
Transformation. However, if you were born after 1990 then you are rapidly
defining this new digital world inside which you grew up. This group is now
coming into the workforce as workers, trend shifters, leaders and decision
makers. This generation grew inside their digital devices. They network,
communicate, share and operate digitally. They live inside their digital
devices – it’s just another evolutionary step. The photograph on top is routine
today rather than an exception. People before 1970 never knew of this world and
had to adapt to fit into it.
The digital world is rapidly
changing around us – the only question is are we reading the writings on the
wall.
66% of companies report that they were under pressure to
reappraise their operating model. 76% said they needed to make
considerable changes to their processes to maintain margins. 82% said that
they were threatened by digital disruption that they could not yet perceive. 18%
said they were victims of digital disruptions.
55% of the top 20 most valuable companies in 2005 are no longer
on that list today. 30% of market share leaders will not exist in 5
years. 30% of market share leaders of 2005 do not exist today.
Gartner Predictions: By 2018 75%
of IT organizations will be Bi-Modal and 50% of them will make a mess.
By 2020 75% of application purchases will done digitally so your mode
today has to be 'Build' and not 'Buy'.
The most disruptive component in the
market today is not the technology but the customer – the new millennial customer, where customer experience
and digital connectivity is the new competitive differentiator.
This disruption was coming and will
now become full blown as the millennials start to join and lead the workforce.
The last wave of Gen-X are currently migrating within the workforce. The Gen-X
world was dominated by a need to follow hard copy, structured and peer-defined
standards and processes - sequential and repetitive. However, the millennials
have grown up under the digitized pressure to be faster, better and smarter
than their peers. While Gen-X have been told that the digital economy will
disrupt the real economies, the millennials cant even perceive the difference
between the two. While the Gen-X looks at computers and digitization as
accelerators the millennials live in that world. The average millennials shops,
reads the news, communicates, shares pictures and connects digitally. Looking
deeper already the things they don’t do digitally are few and far in-between.
How to capture attention in this new
Digital Economy?
In this new digital economy of new
technologies, rapid disruptions have been demonstrated by companies like AOL,
Amazon (most of us forget Amazon started as a book reseller), Uber, Spotify,
Airbnb, etc. These companies continue to dominate and expand in the digital
economy. Our path is clear - we need to adapt to fit into this new digital
world.
One of the key ingredients to
success is to provide instant value to potential services- customers simply
will follow by sharing their good experiences. It is not uncommon to find a
brand leader promising incredible change, and then a few months later they are
just gone. Millennials see the world dominated by digitally visible, instant
value, reactive, agile and benefit-leaders and not by traditional, brick and
mortar companies that react like sloths and continue to exist as legacy ‘king
of the hill’ enterprises. Uber’s disruption to global taxi services in a
few short years exemplifies the power of digital disruption. Uber started
in 2009 with a $200,000 seed money and today stands as a $27 billion global
disrupter. Uber carries the tree hallmarks of the new digital economies,
i.e. simplicity, better services and lower costs- how can one beat that.
The most important part of their business model is that they do not own a
single taxi or a driver, yet give each driver total freedom on when to work and
when to take off. Traditional taxi drivers are reacting with with
strikes, politics, violence and legacy Gen-X reasoning but the millennials
will henceforth only demand these new level of services that have now become
their new benchmark for travel.
Disrupt or be Disrupted? Is
the only path forward..
So one way or another the key is not
to simply survive but to become the disrupter. Here are a few ways we have
helped companies start on the path to disruption:
- Design for the future millennials and not the historical Gen-X: The world around is rapidly being dominated by the new millennials who operate in this world very different. Companies that continue to think legacy will slowly sing into the quagmire of history. Companies that adapt and change to meet the new digital world of millennials will continue to disrupt and thrive. Hire and think for a millennial.
- Innovate to Deliver products and services faster and at lower costs: Look around at the success signatures of the big disrupters- Uber, Airbnb, Apple, ASOS, Spotify, etc. What do they have in common. It can be clubbed into the [1] Internet of things in the form of Uber applications that allows Uber to track every live taxi on the planet against demand in real time; [2] understanding untapped customer needs in the form of providing faster service at lower costs; [3] finding untapped suppliers in the form of private cars not being used optimally for the duration of its life; [4] making it all stick together for a ‘Higher Quality at a lower cost’ paradigm
- Reinvent your full value chain: Companies that have lived, planned and operated inside their firewalls are doomed to predictable outcomes. Digital disruption starts by reinventing the full value chain with one seamless and real-time access. Millennials appreciate innovations that reinvent product delivery and service to make life better and simpler. The new digital disrupters did not invent one new product they reinvented the full value chain in the new digital economy. They predicted what the consumers wanted even before they realized it. The new world not only thrives but seeks these new companies out by constant real time digital scoring and social networking.
- It’s never the technology, but all about benefits and simplicity: So far most technology projects have remained focused on technology as the ultimate provider of solutions. The disrupters realigned their focus on simplification that is enabled by technology. CEO’s worldwide expect 15% to 50% of their future earnings to come from disruptive technology. Companies that are not planning to be on this path will predictively lose 15% to 50% of their market share to disruptive players. On the technology side the platform for the Big-Bets are IoT, Big Data and Digital Transformation. A lot of companies have initiated these projects but unless they are on a digital business benefit track accompanied by true ‘Design Thinking’ with business users Gartner predicts 70% of them will continue to fail or not meet business expectations.
Many ‘experts’ claim that this new
digital revolution is for the millennials only, but it truly isn’t. My mother
at 82 has found the Apple iPad as easy to use and communicate with as do our
nieces and nephews. However, while my mother uses only a few
functionalities the younger generation absorbs new simplicities like a desert
sponge with infinite capabilities for social absorption. How many of us have
not tried and got hooked to these new digital service providers?
- Millennials are on a hyper-growth curve: Not only will they be the largest generation workforce they will also become the largest consumer base that operates and decide digitally. While, technology was important to their predecessors’ millennials see the digital revolution as part of their lives. They seek simplicity, higher quality at a lower cost. Companies like Amazon, Apple, SAP are not simply reinventing the wheel they are out there creating the new digital future and re-designing the future from the ground up on simplicity and real-time. To thrive in the future executives need to become partners with business benefits, simplicity and digital reinvention as never before. We MUST get outside our familiar fire-walls as most of these answers lie outside, i.e. in the upstream and downstream domains of our value chain.
Disruption is the now the only constant?
If disruption is the inevitable
constant, then we all have a ‘Zero Option’ in this new game that is right now
changing the very definition of industries, products and services.
Every industry, product and service
is today prone to digital disruption. All the big players are threatened as
never before. Unfortunately, these digital disruptions do not take decades to
bring about change- they are becoming more and more rapid as the number of
millennials increase in the consumer market. These new disrupters consisting of
small team sitting right now in some garage could bring another disruptive idea
to life.
So plan, plan very hard indeed-
to be the Disrupter or be disrupted!
