In the old days, size was a buffer. After a business reached a certain maturity level, leaders could relax and think about the future. Consider those days a memory. It’s not just businesses under attack, but entire business models.
Originally posted on Diginomica.com
In many cases, disruption comes from the outside, which is what happened with the fashion industry. Vue.ai is a good example of an artificial intelligence platform that makes personal style recommendations, going right around the big fashion houses.
Wait-and-see is a recipe for obsolescence, but making the wrong move can be just as destructive. To get a clearer view into what has worked in the real world, I interviewed three business leaders who have navigated disruption in both the public and the private sector.
- David Walsh, CFO at the New Zealand Post, discussed how to transform from process-focused to customer-focused organisation.
- Luke Mason, senior financial analyst at DOF Subsea-Australia, spoke on the process of transforming from a supplier-led to a buyer-led market.
- Sarndrah Horsfall, executive director for business services at AHPRA-Australia, covered how to lead after the transformation of an organization’s entire identity.
What emerged from those discussions were these five powerful tactics for countering the forces of disruption:
1. Embrace customer-centricity
The majority of businesses are now competing not based on price or quality, but on which ones are able to provide the best customer experience. Relevancy tops the list of priorities, and that comes from knowing what the customer really needs. Walsh explains:
Customer experience is today’s only lever to ensure we can claim a leading position in the parcel market. It’s not about faster or more, it’s about better as in ‘more personalized’. The product is important, the experience even more. These days, people can change a mortgage on the fly – so they will if they feel like it.
2. Less is more
Scaling is all about choosing right scale to fit the strategy at the moment. Agility can refer to speed in changing directions, but it can also refer to speed in adjusting ratios of permanent to contingent staff. Mason says:
If you have to cut cost, you either release people or you become more innovative. Losing people is losing knowledge and expertise… and that’s our life-blood, i.e., we try to avoid this at all times. Our investment in agility has made us nimble, i.e., we can change when we need to without delay or dependence on others. That’s a great asset in a challenging and highly competitive market. The result: We’ve been continuing to win work, outperform our competition and got full control over our financial performance.
3. Speed matters
Unlike the past, size is now the opposite of insulation from competition. Speed in decision-making and deployment are the key elements that can keep you out in front of disruption in your industry.
Horsfall credits her cloud-based platform as critical to their success by making it possible “to make decisions in real-time, especially in turbulent times.” She explains:
It’s crucial that key stakeholders have full confidence in us. Information is the foundation for all our decisions and, as such, it needs to be 100% accurate, timely and relevant at all levels of the business. We selected Unit4 Business World On! as our ERP backbone. In particular, its architectural design allows us to deliver upon the sophisticated information needs of our organization.
4. Business digitalization is the way forward
If it can be done, it can be done faster, within tighter quality constraints. Automation and new technology platforms are rushing ahead, with or without you. Disruptors are taking advantage of what wasn’t even possible a few years ago.
Horsfall relates how shocked her organisation was by the results of a comprehensive efficiency audit, which highlighted “over-reliance on manual processes.” She recounts the outcome of further investigations:
This led us to commence a lean review of all of our business and regulatory processes. The outcome was a very cumbersome process with a high degree of ‘noise’ (non-value adding activities) in our system. For our back office systems, 57% of finance and procurement activity and 51% of human resources activity was identified as noise. Manual processing, manipulation and a lack of system supported processes were the main causes of the noise. You can imagine how we could revolutionize our systems and processes if similar ‘noise’ levels were applied in other areas.
5. Put value delivery at the heart of everything
People, product and process all matter. None can be put on the back burner. What matters most, however, is communicating the value of what do. Even the best-run companies can’t survive unless they are able to make their case convincingly to partners and the greater market. It all comes back to customer perception. Walsh warns:
It’s too easy to obtain an internally focused mind-set which will just blind-fold you and get you even further away from where you need to be. The market is disrupted for a reason – and the customer is the one who benefits. New norms are introduced and if you want to be playing that market, you have to listen, understand what’s going on and what they expect to make their life easier. Then you need to be responsive and deliver on that expectation – and transform your organization to make it sustainable.
In short, there’s no avoiding disruption. The fourth industrial revolution is underway. The way to respond to it is by improving the customer experience, digitizing everything for speed, and scaling to stay in step with the market. The marketplace of the future belongs to responsive schooners, not stately ocean liners. Size doesn’t matter anymore. Your ability to survive disruption will depend on the velocity of your data and your perceived value to the end customer.
Image credit – Businessman on edge fighting off challenge © eelnosiva – Fotolia.com