
Arm For Disruption: Why being prepared is key to survival
Disruption, digital or otherwise, continues to be at the forefront when discussing what worries business executives. We saw last year IBM released it’s report ‘Refining Boundaries — Insights from the Global C-suite Study’ that showed some interesting results. Eclipsing all other responses, when asked what they thought would be a part of the “next wave” of trends or developments, was industry convergence.
This idea of convergence is not new, however it is escalating at speeds not experienced before. The frontrunners in these new offerings are often start-ups, who, as small, agile teams, have the flexibility and support to reach beyond the ‘standard procedure’ of the past that dictates that large organisations must exist for their shareholders. They are also fortunate to be developing their products and services in the technology age, which provides a limitless global view.
The issue of disruption, however, is not the problem for most large organisations. They are highly capable of disruption, but what is becoming more evident is that they lack preparedness for it and operate in a highly risk-averse model. How can you prepare for something you don’t see coming? Leaders of industry are struggling to find an offensive strategy, the perfect example of this struggle comes with the much anticipated launch of Amazon in Australia.
Amazon is not a startup. They are a force to be reckoned with, clocking $US136bn in sales, they are a clear threat to all retail giants worldwide. They have been expanding their operation over the course of the last few years, extending their retail offering from the US over to Europe and ultimately crushing the market. Not only have they been expanding their existing offering, they are also consistently launching new products with a heavy focus on innovation and customer experience such as Amazon Go.
These strategic moves have not been kept a secret in a Bond villain-esque lair, they have been out for the whole world to observe. This then begs the question, why have Australian retail giants been scrambling since Amazon announced it’s plans to launch local operations? Did they not see it coming?
Yes, it’s likely that they did. The problem though is what to do about it. This is one of the largest, most profitable and innovative businesses globally, how does one prepare for that?
Some organisations will try to adjust their business model, refresh their product or service, or up their marketing efforts. None of this is wrong, it’s just more like a bandaid on a bullet wound when done in isolation. As Accenture puts it, companies that are prepared for the unexpected “are both strategising and operating in remarkably different ways from their less-ready peers — an approach we call thriving on disruption.”
This preparedness requires a bigger view, all key players in a business need to take a step back and review the high-level strategy, business model and service lines as a whole. An approach that can seem daunting and costly. The outcome though, is a business that is agile and adaptable. This new digital age has created a highly reactive business environment, much to the discomfort of the planners that thrive on long term strategies. You can no longer have a detailed 3–5 year strategy, because there is a high chance that there will be the next Uber or AirBnB type disruptor regardless of the industry you function in.
The best way forward is to view your business model and value proposition with fresh eyes to help you understand the environment as a whole both internally and externally and to develop a vision and roadmap that places your business into the offensive, removing the reactive game of catch up.
These ‘fresh eyes’ may be something out of your comfort zone. As stated earlier, industry convergence is predicted as a major feature of the ‘next wave’ of trends. As an organisation you could take this approach with your hiring decisions. If you are a large corporate, for example, with staff operating in silo, rather than continuing your hiring model as it is, move to hire an innovation team. These positions could cross the divides of agile, digital, entrepreneur, architecture, strategy, and research and would exist to create and execute the offensive strategy for the organisation.
Even better? They could help to evolve your organisation into the disruptor that everyone else is scrambling to keep up with.
I’d love to hear your thoughts on industry convergence, reach out in the comments or feel free to connect with me on LinkedIn or through my website.