There is a game changing digital disruption globally underway, ignited by emerging technologies like advances in AI, big data, robotics, IoT, blockchain and new software-enabled industrial platforms. In every sector, newer entrants are lowering their prices, catering to consumers in unique ways, optimizing underutilized assets, and hiring digitally skilled resources with efficient working styles.
The digital disruption is a threat affecting a wide range of industries, and organizations need to move fast enough to meet this change. It is imperative to have a distinctive identity to stand apart from the crowd and strive.
The first and the most important step is to recognize the change and acknowledge that it is happening. Do not dismiss the new digitally enabled competitors around but look at them as companies you can learn from.
You have to start moving on purposefully. Without reacting or panicking, strategize and plan the path of your company. Change your business model right away and develop your own sustainable model supporting your distinctive capabilities while winding up the assets no longer needed when the disruption fully takes over. Also evaluate and refine the new approach continuously and test out new products and services with real customers. This will give you a heads on if the industry changes take over and you will be able to move fast with the advantage of an early start.
Focus on your right to win by building your identity. Develop a strong distinct identity for your company. Without giving up entirely on your old business model which got you till here, build on existing strengths and core capabilities to create a system of distinctive cross capabilities. You gain your right to win by meeting every challenge with the likelihood of success.
Aim to create your customers' future. It helps to meet all of the customer's needs so that they would want to be associated with the company for a lifetime. Being focused on the customer's future and figuring out what they would need even before they realize it themselves would go a long way. This would mean making things easier and also reducing the price they have to pay. Most successful consumer-oriented companies depend on privileged access to their customers for this. They gather first-hand information and feedback from their customers while creating new products.
You must think of relooking at price to drive demand. Price reduction is one of the most important effects of digital disruption to which customers react very powerfully. No other disruptor can compete with lowered prices when it comes to building a larger customer base. This could often mean using digital technology in inventive ways, to scale up your new business model and aim for long term scalability and market share
You have to concentrate on benefiting from overlooked assets. You must find ways to create value from the underutilized assets. These assets are not always physical but can include proprietary information, specialized skills or collected data. It may take some time before a compelling and profitable approach to your assets can be developed. But while you are working on your approach, you can consider separating the assets that pull you back or need ongoing costs. All your assets should contribute to, or benefit from, your distinctive capabilities.
Keep a control over your part of the platform. A disruptive company doesn't do everything itself but also relies on the capabilities provided by others. These capabilities are the emerging business-to-business big digital platforms which will help businesses transform by providing new ways of creating value from digital assets at a much greater scale and at much lesser costs. Digital technology allows you to use platforms to break free from the limitations of your own industry as it transcends boundaries among industries. Some companies flourish by becoming platform providers but you can also focus on a part of the platform where you create secure standards for an entire ecosystem.
Focus on building your future by integrating, not isolating. Change doesn't happen in silos but it requires a much larger digital effort. Any digital side projects like programs, products or services, to stand on their own, need to have a connection between the activity and the core enterprise. Being integrated with the rest of the company will give these projects the support and capability to be sustainable. Without integration, even the core company doesn't learn or benefit from their capabilities.
You have to challenge the rules. Sometimes if a regulation or government structure is coming in the way of customers getting what they want, it is ready for a disruptive move. Most regulations are passed for a good reason but if you can tune your practices towards that reason and intent instead of the letter of the law, you will strive. Considering you have no control over rules and regulations imposed by law, your interpretation of them is what is under your control. Comparing interpretations with your competitors will help you assess which constraints you can afford to loosen up
Look at defining a new innovative way of working. Even though a lot of companies have been experimenting with new technologies, the ones that have been successful are the ones who used digital technology to change the way they operate. They realign marketing, IT, and finance together, and every aspect of their organization reflects that understanding. You can start with recruiting teams of people who can combine different skills and have the ability to operate at two different conceptual levels. This will have made it possible to imagine innovative products and services. Then move on to customer and employee experience.
Digital disruption can be a boon and an opportunity to rethink your business. Your challenge is to create a new business model and value proposition and position your company for long-term success.