From Brexit to global politics, new technologies to regulation and governance, over the last few years there has been a general feeling of caution from businesses surrounded by disruption from all sides.
But it is not all doom and gloom, with change comes opportunity and there is a huge chance for businesses to embrace this opportunity. While there will still always be uncertainty in the market and elements beyond control these are exciting times to be in business.
In particular, the continued rapid advancement of technology is hugely interesting, especially in terms of automation and decisioning. There is also technology coming down the line that will really start to enable the connected homes that have been talked about for the last few years.
Of course, all this new technology will continue to drive the disruption of traditional business models. The real challenge for businesses is in how to respond quickly, but appropriately to the disruption occurring around them so that they are able to harness the opportunities that change brings.
Responding to change
Ultimately, what will drive business value is how organisations respond to change and this response needs to be both swift and appropriate. Organisations can no longer afford to think in three or five year cycles, the world is moving far too fast. As such, a huge cultural shift is needed where innovation is embraced across an entire business, not just in siloed pockets.
While it may sound contradictory, failure should be welcomed. The speed at which new technologies, approaches and methods can now be tried is phenomenal. And yes, many of those attempts will fail, but the faster you fail, the faster you can ultimately succeed.
It is those businesses that can quickly spot when things are not working and try something else who will be the ones that triumph.
However, while breeding a culture of innovation is key, it is also vital to have a carefully thought out business strategy, to help guide innovation and avoid getting distracted.
The many faces of disruption
Mention the word disruptors, and slick new start-ups, who can rapidly harness new technology and respond to changing customer demands at lightening speed, spring to mind. In reality, disruption goes much further than just agile organisations taking advantage of new technology to turn traditional business models on their heads.
Disruption can come from competitors, the market, customers, or even from within a business itself! And while the word ‘disruption’ is firmly on the way to becoming somewhat hackneyed, it is also important to remember that the notion of disruption is not a new one at all. It has always been human nature to push boundaries and find faster, better and more efficient ways of doing things. It is just that a combination of advancing technology and evolving customer expectations has accelerated disruption to unprecedented levels.
Four key areas of disruption
Broadly speaking, disruption tends to fall into four main camps. These can be summarised as:
1. The market
From legislation and regulation such as GDPR, to political upheaval in the shape of Brexit, to the fluctuating price of oil – the wider market can throw curveballs that disrupt businesses of all sizes from across industry. While many of these disruptions are completely out of the control of individual businesses, what they can control is their understanding of the market as a whole and their ability to respond in an intelligent and agile way.
While Henry Ford’s philosophy of ‘don’t think about your competitors, think about yourself’, is generally very sound, businesses can now be brought to market faster than ever before and can therefore disrupt incredibly quickly. So on the one hand, businesses should absolutely focus on their own solid business strategies, but do increasingly need to keep a very close eye on competitors and would be competitors. However, it is not enough to merely quantify the risk here, businesses need to also ensure they can react to nimble start-ups. Key here is for legacy businesses to not underestimate the strengths their size and history may offer them. They may not be able to move quite as quickly as a new competitor on the block, but then again that competitor is unlikely to have an established supply chain, for example.
We are truly in the age of the customer, where consumer expectations are evolving as rapidly as emerging technology is. Today’s consumers are sophisticated and empowered and they expect personalised, easy to use, speedy and efficient experiences across all areas of their lives. It is vital for businesses to know their customers inside out and ultimately be able to pre-empt their needs. Those organisations who become complacent towards their customers do so at their own peril. Even the mightiest of brands can fall due to changes in customer behaviours or feelings.
4. Your own business
All too often, one of the biggest disruptions to business comes from within. By not listening to customers, not fully understanding the market, not moving quickly enough in responding to change, or in making decisions too early for their capabilities and trying to ‘jump ahead’ on the transformation journey before they are ready, organisations are harming themselves. Legacy businesses in particular can be guilty of sticking with the status quo, out of fear or indecision or both. But all this does is place limits and boundaries on a business and gives its competitors the space and time to steal market share.
Disruption can be challenging, especially when it comes (as it increasingly does) from multiple directions and embracing change isn’t always easy. However, just because something is challenging or difficult, doesn’t mean that it can’t also bring huge opportunities.
I strongly urge all businesses not to fear disruption. If you are properly prepared, by having a well researched and executed business strategy, as well as a good understanding of how you can be disrupted and (more importantly) how you can respond to disruption, then disruption isn’t something that should be seen as a threat. Instead, disruption can be embraced for the opportunities it presents.
Dan Telling, managing director Bench
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