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.