Is your business ready to survive the big disruption squeeze?
Cade Witnish shares some ways of how you can adapt to digital disruption and how some brands stand to gain from it.
Australia has historically been good at certain aspects of innovation. We are among the most eager adopters of technologies and our nation is one of the world’s top five for smartphone penetration in 2011 (according to TomiAhonen Consulting) but with this love affair comes expectations – we expect technology to improve efficiencies and productivity.
It is evident for business that digital opens up unprecedented possibilities.
According to Deloitte’s ‘Build a Lucky Country, Vol 2 Whitepaper’, one-third of the Australian economy faces imminent and substantial disruption by digital technologies and business models – what they call a ‘short fuse, big bang’ scenario.
It is a mistake to think of this digital disruption as a revolution of technology rather than business evolution. Digital reduces the barriers to entry, blurs category boundaries and opens doors for the next generation of entrepreneurs and business entities, thus putting pressures on existing industries and market leaders to adapt or move aside.
Deloitte forecast that Australia’s digital economy will hit $139 billion by 2020 (that’s 7.3% of GDP)
This obsession to connectivity and the availability of information is shifting the balance of power and control – away from organisations toward individuals. This shift is placing individuals in the driver’s seat.
The greatest benefit experienced from digital innovation is the ease of moving into new customer segments or the adjacent possible. If an organisation can identify key trends and create new value, they stand to gain from digital disruption. But this all requires the capacity, agility and resources to act.
Larger organisations who can afford to run innovation teams and start-ups, who are often the cause of industry disruption, benefit from this business evolution – but where does this leave small to medium size business owners?
As companies such as Telstra and RAE embedding teams within their businesses to identify and combat the onslaught of hungry disruptive start-ups nipping at their heels.
This serves a couple of purposes:
- It makes sure companies stay relevant. While the rest of the company focus on delivering ‘right now’, these teams focus on ‘what’s next’.
- It’s far more cost effective to build and test a prototype/new product on an audience segments, and not relate it to your brand. This safeguards your brand and is more cost effective than building a scalable enterprise solution without testing viability.
We’ve seen some of the medium sized companies get caught in the middle. As a result there is an emerging trend among medium size companies, they are contracting in digital agencies like ours, for explosive sprint patches of R&D and prototyping.
For SMEs, leveraging a team of expertise is faster and more cost effective than building one. The sorts of questions, management needs to be thinking about are:
- What do you know about your industry?
– Are you leading, keeping pace of falling behind your competitors in terms of organisational innovations?
– What are the most disruptive innovations in your industry?
– How are you identifying and tracking trends in your industry?
- Do you really know your customers?
– How curious are you about them – their habits, demographics etc?
– How have their behaviour changed as a result of digital products and services?
- Is your organisation internally ready?
– Does your organisation’s culture embrace innovation?
– Are you agile enough?
– Have you created any innovative partnerships?
- What’s next?
– How could you disrupt your own business or industry?
– Can you learn from other industries across the world that have been disrupted?
It’s vital to recognise that when it comes to digital disruption, the biggest risk is to do ignore it. So how ready are you?
In two years customers from your industry will be using a ground-breaking new product. The goal of your innovation team or hired guns is to be the one who builds it.