Of all the off-handed terms thrown around boardrooms today, ‘disruption’ must be right up there. We use it to describe any number of corporate phenomena, especially if the conversation veers into the realm of technology.
A great piece penned recently by DiData’s Alison Jacobson – ‘18 signs you’re going to be disrupted’ – summarises some of the warning signals that imply your business simply won’t keep pace with the accelerating speed of digital transformation.
It’s worth exploring in more detail and unpacking some of the key themes:
Customer-centricity encompasses a number of principles, but the primary goals are to meet customer needs in the way that suits their individual preferences. With intelligent, adaptable digital services that understand the user and their context, it becomes possible to provide ‘personalisation at scale’.
So, a retailer could present targeted offers based on which shopping centre you’re currently visiting, or your purchase history (rather than the traditional model of promoting the same basket of goods to all consumers).
Within the organisation, Jacobson notes the importance of aligning board-level metrics with customer-centricity, which should be weighted more strongly than short-term profit targets. If Amazon or Uber had been forced to grow with the same shareholder pressure as most other companies, they wouldn’t have been able to forsake profit for long-term value creation. Ultimately, they’ve become more powerful enterprises by focusing on sustainable customer experience over recent years.
Another great point –
“when your salespeople talk to customers, they’ve been trained to talk but not to listen “
– encapsulates the myopic thinking that characterises traditional businesses. In the digital era, with every opportunity to listen to customer feedback, track their interactions, and understand their pain-points, there is simply no excuse for not developing solutions with the customer in mind. This is where we believe that the Insurance Industry is highly likely to disrupted with horizontal integration and micro services as illustrated here:
This leads us into the second theme: data.
If you’re still grappling with messy, siloed data, you’re at a severe risk of falling behind. Organisations will increasingly be asked to make bold decisions, and to make them quickly. You can reduce a lot of the bias in this decision-making by relying on solid and comprehensive data.
Think about the continual, albeit subtle changes to services like Netflix or Google Maps. None of these changes are built ‘by gut feel’, they are all the result of user data and user testing which is clearly validated.
Jacobson refers to the analogy of
“a production line, which requires continual optimisation. “
As we enter the realm of the so-called ‘4th Industrial Revolution’, it’s interesting to draw parallels to the previous Industrial Revolution. Back then, assembly lines couldn’t easily be reconfigured; but as we architect our businesses as digital enterprises, every moving piece can be monitored and continually fine-tuned. And while the concept of Big Data is often used to describe the external environments (markets, customers, trends), it’s equally applicable inside the business’ operations.
Merely optimising the operations won’t be enough to save you from the dreaded ‘D word. As cloud-based technology commoditises and democratises every system, tool or process, it’s your people that provide the only true differentiator from competition. The article is spot-on in saying that if you’re still doggedly clinging to annual performance appraisals, and rigid hiring policies that restrict candidates to certain degrees or qualifications, you’re unlikely to survive the oncoming waves of digital disruption. In this era, new skills are required… creative minds, and fresh thinking.
It’s quite possible that an inexperienced millennial will provide sharper, more relevant insights, than a 40-year veteran who’s battled to adapt to the changing world of work. How will you re-frame your recruiting approach to take risks, see talent in new lights, and offer more flexible arrangements in order to retain the right people?
This is a big one, but perhaps the theme that we’re most blase about. Even now, in 2016, we’re seeing slow-to-move companies still turning in decent results in their annual reports. Being first to market or highly innovative doesn’t seem to yield significant rewards.
But before too long, this will change. New windows of opportunity will open and close more quickly than before. Customers’ insatiable demands for instant gratification will only grow. Jacobson captures the issue perfectly, saying that you’re at risk of disruption if
” your turnaround time from idea to execution is longer than 30 days for small projects and 90 days for big ones.”
With the right digital platforms and approach, it becomes possible to build digital services in a matter of hours or days, rather than weeks or months. In the future, this is just a ticket to the game.
Whatever industry you’re in, disruption will happen.
The only question is whether you’ll be one of the disruptors, or one of the disrupted.