‘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  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;  understanding untapped customer needs in the form of providing faster service at lower costs;  finding untapped suppliers in the form of private cars not being used optimally for the duration of its life;  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!