Iconic Moves
A growth strategy to keep your business alive.
When dealing with digital disruption, we tend to confuse the terms: digitization and digitalization. The digitized organization’s principle is the integration and standardization of the companies processed to reach an operational efficiency. On the other hand, the digital organization’s role is to find new revenues streams by connecting new value propositions based on a digital experience with strategic moves.
What is an iconic move?
To reach the higher customer expectations, companies need to rethink their value offerings through iconic moves. An iconic move is a market action that implies a commitment from the company. It requires changes to reach into the way a business operates. They do not rely on product innovation; they are strategic actions that change the way people view and interact with the business.
What customer’s expectations is your brand evolving?
1- Primary and Added Functionalities
At first, brands were compared at a local level and classical expectations were relatively easy to meet. Technology didn’t allow disruptive architectural shifts. The focal point was put on digitization, not digitalization. Once the need was triggered, direct competition added functionalities to the product focusing on usability and ease of use along with aesthetics to attract the customer by changing the product’s design.
2- Globalization
The increasing fluid movement of capital, products and people across the globe has created a new commercial reality on an unimagined scale of magnitude.[1] Customers have now access to a variety of products worldwide. However, conditions differ across countries so brands customize products and use emotionality to enter new markets.
3- Technological Disruption
Here is where disruptive companies enter the scene. Disruptive innovation happens when a smaller company moves upmarket or creates a new market segment and challenges larger, established businesses. As you can see, there are two sides that take risks: the small company entering the low end of a market, and the stable company that need to avoid other’s disruption.
Disruptive companies in tech-savvy industries have enriched the value constellation they offered customers adding valuation metrics to customer purchase decisions. To reach the evolving customer expectations on a technological society you must consider the following points:[3]
- Available information in real time
- Wide range of options from global competitors and disruptors
- Speeds of adoption never seen before
- Loyalty (only possible when constantly shifing customer’s expectations)
- Quality is the new standard
Choosing beetween Incremental Innovation and Iconic Moves
Even reaching all the statements mentioned previously, surpassing customer’s expectations and getting their attention in a “fast-tech” society is still not enough. Innovation has become a major factor in determining modern enterprises’ longevity and success. Some companies prefer to utilize incremental innovation by improving and upgrading the company’s existing products, services or processes.
However, in an age of unprecedented abundance of choice and speed of innovation, customers’ expectations are moving faster than businesses. Incremental change is still essential but it’s no longer sufficient. It takes iconic moves to leap ahead of customers and competitors.
How can you start applying iconic moves?
I. Lead the change: Iconic moves happen within a process of continuous improvement. Constantly be in tune with customers, transforming data, observing into insight and offering new, better, and different on a near daily basis.
II. Shift customers expectations: reach the primary and added functionalities, globalization and the tech-savvy fundaments. Create a new normal by sustaining differentiation.
III. Sense the risk: Recognizing weak signals is crucial. Be aware of competitors, increase R&D and always focus on your customers.
IV. Align Vision and Performance: Iconic moves align the business, customers, and the roles each one of them play. Force internal commitment to change. It is not only an announcement, credible actions require follow-through.
That’s enough theory for today, let’s put a real example!
You all have heard of big “BANGs” in companies where iconic moves are visible: NETFLIX transforming the way we consume television, AMAZON transforming the e-commerce experience or UBER reinventing the immediacy of cabs services through an app.
How to know what the future will demand of our company? A journalist once asked the great hockey player, Wayne Gretzky, how he was so good. He responded: “I never skate to where the puck is. I always skate to where the puck is going to be.”[2]
For the past 100+ years, IBM has re-focused 5 times, powering the evolution of business and society. Let me tell you an example about one of IBM’s strategic moves from the past.
In the early 1990s, the opportunity for growth through the internet became clear: it would allow people to find what they’re looking for, in an easier and cheaper way.
Sears, a retail powerhouse and IBM, decided to put together a joint venture, called Prodigy. Prodigy decided to focus on the ability to shop online and find information. By 1992, they had over 2 million subscribers.
Prodigy system also allowed to send messages. Instead of shopping, they noticed customers were spending their time sending messages to each other. So, they imposed a fee for that service thinking it made sense to push the customers back on the strategy.
The system wasn’t good at routing emails. The problem was that they didn’t know what the technology would be used for. That’s the mistake: they decided to focus on a strategy that turned out to be wrong rather that see what was emerging. [2]
Even if they were the first in the market to explore the idea, IBM learned from the disruptive opportunity and decades later, it continues to sell ecommerce licenses and has successfully transformed itself overtime.
In fact, in 2002, IBM’s CEO reshape IBM’s strategy: he noticed that hardware technology markets (PCs, printers and disk storage) were becoming commoditized. So instead of only helping clients obtain technology, he thought IBM could enter a new market by delivering business value from it.[4]
IBM consequently exited several hardware markets, acquired PwC consulting to build its global business services division (GBS). From that point, the company transformed itself from the PC Era to the Services Era until today. That transition was as a way to understand how to make productivity improvements and still make the business go forward.
The main lesson is:
if the company is not willing to integrate forward, it can’t succeed. The point the company needs to reach changes over time. Even if that point seems a long way away, you always have to be prepared to succeed.
We have seen how IBM leads the change and is nowadays more that a supplier: IBM is a partner of TRUST through its EXPERIENCE.
Thank you very much for your time.
[1] Harvard Business Review: the-globalization-of-markets
[2] Harvard School Online, Disruptive Strategy Course by Clayton M.Christensen.
[3] IE University, Digital Marketing Course — Disruption Module
[4] Mwd advisors — BPM case study: IBM’s Enterprise Transformation
