Thursday, 2 March 2017

Go beyond digital innovations to ride out the market disruptions

The world is the midst of rapid market disruption. To manage the change, there are many calls  to create a more innovative society by digitalizing the economy.

While attentions are focused on the digital innovations that are driving the disruptions, we must also be mindful of the other non-technical trends that at play. Together with digital technology, they are creating the perfect environment for the disruptions to inflict damages to jobs and commerce.

This includes the proliferation of disruptive business models that are reshaping the business landscape. Whether it is the subscription model of cloud computing and IaaS, marketplace model of Uber or the freemium revenue model of LinkedIn, they are transforming how business values are being created and distributed.

Instead of me too platform, disruptive organisations are focusing their efforts to create, disintermediate, re-engineer and optimise their products and services in order to gain competitive value positions. These are often aided by established and well-managed companies that are struggling with change, doing the same thing for the same profitability, and in the same way for a long period time.

The arrival of millennials is another critical demographic change that is challenge for the business world. Their comfort with digital technologies, communication and social media are facilitating the market disruptions.

Increasingly, these behavioural effects are being felt in the commerce as more millennials are turning to the internet of things to seek and influence opinions, make online purchases or to express service's dissatisfaction. These have severe implications as it can affect physical retail shopping, reconfigure supply chain, affect trade reputation, and even reduce tax collection.

But for the disruptive companies, these are not threats but golden opportunities to deliver an exceptional customer experience that cut across multiple touch points and in multiple channels over time. To achieve this level of experience, faceless machine interface is being deployed more, ahead of human touch. This has severe repercussion on the job as more self-servicing technologies are replacing client-servicing functions.

So, what can organisations and individuals do to respond to these disruptive trends? First, busibess as usual or  denying the looming technology and business model change will longer be that wise. Instead, there should be a mindset renewal to adopt the same threatening technologies and business models to ride the market disruptions - fight fire with the own firewall of disruptive technology or model.

Second, delivering sustain customer experience across multiple touch points and channels over time is key to win endorsements from the demanding generation. This implies more efforts to tailor the products and services that are more in line with market's aspirations. For the individual, it also means more investment of times and efforts to acquire the knowledge, skill and experience that are needed by industries.

Third, a good plan is not sufficient. It must be matched by patient and wise execution. Rushing to implement without due diligence and good counsel is a recipe for bad outcomes.

Finally, you cannot do it alone as the resources are limited. Instead, leaders of organisations and individual should acquire deep skills to leverage others: how to lead change, develop the great idea and market it effectively to customers and investors, and collaborate to gain collective strengths to achieve competitive advantage.

Tuesday, 7 February 2017

TPP's demise a reminder that old order does not hold

Recently, I wrote a commentary that was published in the TODAY newspaper about the impact of America's withdrawal from the Trans-Pacific Pact (TPP). While this can be a dreadful disappointment to other members of the TPP,  there is a silver lining to it as it is calling out countries to do thing differently to manage the impact of this US's decision. 

Thursday, 12 January 2017

How Uber is changing the world?

After much reading about the disruptive the power of Uber to transform the transportation industry,  I finally have the opportunity to feel it at first-hand after taking a ride with the service.

Hailing a Uber car is a breeze. Just whip out your handphone, key in your request and soon a private car will arrive to pick you up. While the short waiting time is a surprise, it is the final bill that will cheer the heart. Instead of paying through the roof with a fixed base charge and other surcharges in the cities, the fare is pretty inexpensive during non-peak hours. To add to the joys, there are more tempting promotions to entice us to come back for more benefits.

For this, consumers have to thank Uber's powerful loyalty program that keeps on churning out promotions after promotions for using its service. While these monetary benefits are music to the consumers, they can be catastrophic for the incumbents.

The scene on the road is not pretty as many empty cabs are cruising the road while their potential passengers are using their phones to book a Uber's cab.This change of consumers' habits can have grave implications as it can hit cab drivers' take-home earnings drastically: from booking fee, high base charge, and fewer consumers.

Despite this enormous threat from Uber, the renting company's inertia to change is still amazing strong: No mobile app, same rental fee, rigid base charge, booking fee, many surcharges and no promotion. No wonder, cab drivers are protesting or transforming themselves into Uber's drivers.

To limit the damage, some affected rental companies are substantially lowering car rental rate to match Uber. As for the rest, they are still adopting a wait-and-see attitude. While lowering leasing cost is welcomed, it is still wholly inadequate to compete with Uber. To do that, it requires a dramatic mentality's shift to embrace shared wins for consumers, customers, and the company.

This will be the hardest aspect of the transformation as it departs greatly from focusing on own bottom line and shareholder's benefits. Continuously to go down this path amid the strong Uber's challenge and changing consumers' behaviours will also be disastrous for the renting company and their stakeholders.

To add to the incumbents' miseries, this shared benefit alone is still insufficient as there are other Uber's comparative advantages that collectively provides the company with the STAR competitive advantage.  This STAR quality will be discussed in my next book that is expected to released in 3rd or 4th quarter of this 2017.