“Innovation” and “Disruption” are becoming increasingly synonymous. Nearly every day, a story is published about the disruption of an established business model by an emerging competitor. Enter Netflix. Exit Blockbuster. Enter Amazon. Exit Circuit City and Borders. Of all the companies on the Fortune 500 list in 1955, only 12% remain. The rapid pace and scale of disruption has given way to the fourth Industrial Revolution, known as Industry 4.0. Companies have experienced exponential growth in the past 4 years, which has surpassed the collective growth they have experienced in the past 50 years.
So how has this exponential growth come to be? The answer lies in “shared consumerism.” Innovators are not only finding new ways to deliver on the changing needs of the customer, but are showing consumerism how differently their needs can be! They are creating new business models to increase productivity from existing shared assets. Traditional companies struggle to respond to the increasing levels of digital innovation. Capgemini’s latest research found that nearly 74% of companies responded to digital disruption in the 2nd year of its emergence. However, the vast majority of companies that went bankrupt responded only after the digital disruption had firmly taken root. As companies like Airbnb and Uber disrupt entire industries, businesses cannot afford to react slowly.
So how can traditional companies respond when faced with digital disruption?
Being Agile and Nimble
Management has to lead the way by having shorter decision cycles, therefore converting the threat of cannibalizing an existing business into creating new opportunities.
Companies have to stay ahead of the curve in the application of advancements in technology.
Embrace the “Always On” Consumer
Companies must offer consistent, seamless, responsive offers to show that the company remembers, understands and cares what the consumer is looking for. By exceeding customers’ expectations and addressing the changes in their lifestyle, companies will gain not only customer loyalty, but earn a competitive advantage.
Be Insight Driven
Lastly, companies have to tap into the insights available from the exponentially increasing amount of information available today. Through the Internet of Things, cloud enablement devices, and big data analytics, companies can now take initiative in truly understanding and anticipating customer behavior. The innovator’s recipe for success is utilizing a combination of these capabilities. For business innovation to show results, in addition to continuous improvement cycles of products and services as well as the use of utilities, globalization and industrialization, there is a need to think with a predictable outcome in mind. I call this Innovate 2 Disrupt.
Closer to home, Canada is shifting from being a resource economy to becoming an innovation economy for the digital age. It’s encouraging to see how businesses in Canada are embracing the concept of market disruption through a series of initiatives supported by innovation hubs like MaRS Discovery District and Communitech. We will soon launch the Capgemini Applied Innovation Discover Center – Toronto to help companies with their innovation strategies. Just as a successful company should do, Capgemini Canada is Innovating 2 Disrupt.