There are many things that can trigger change in an industry or sector. Some are slow burners that result in change over time; others can drive a dramatic, seismic shift almost overnight. Societal changes, such as the adoption of the internet by consumers, or the knock-on effect on the tobacco and advertising industries of the smoking ban, are relatively slow and sometimes only noticed in hindsight. Others, like changes in legislation, have a deadline on the horizon that everyone works towards, so aren’t that disruptive or surprising. The third type are the most interesting: the innovators that can render the old ways obsolete very suddenly.
The move to a digital economy has vividly disrupted many sectors – consider how Airbnb has changed holiday accommodation or how Uber has revolutionised taxi services, for example. Research continually shows that CEO’s across all sectors, from finance to farming, retail to real estate, know that digital is going to disrupt their industry at some point. It’s in their end-of-year predictions, it’s in their competitor analyses, and written about in all of their industry press. Yet a worryingly low percentage of them have digital transformation at the top of their corporate agenda, and even fewer have actually embarked upon their digital transformation journey in recent years.
It’s not like there haven’t been plenty of high-profile casualties acting to spur them on. The list of bricks and mortar businesses that have collapsed in the wake of their agile, online competition is huge – just take a look at the high street names from a decade ago that are no longer with us. Progressive, technology-focused organisations are reshaping the consumer marketplace everywhere, and companies that don’t adapt won’t survive. You don’t have to become a Google, an Amazon or a Spotify and be responsible for changing an entire market, of course, but you do need to keep up and not be complacent. Think of the three names that led the mobile phone market a decade ago and try buying a Nokia, Motorola or Blackberry product now…
Thankfully, as encouragement, there have been plenty of success stories when companies have evolved. Apple used to only sell computers, now look where they are. Netflix used to rent DVDs as a competitor to Blockbuster before it took streaming to the masses and took data analytics to the next level. 15 years ago, Lego was in debt and unfashionable before it underwent huge transformation and moved into films and theme parks. Even Kodak, which filed for bankruptcy after digital photography almost wiped out camera film entirely, reinvented themselves by launching its own cryptocurrency.
Post-pandemic, in whatever the New Normal becomes, the need to go digital and evolve to survive will be more focused than ever, particularly in consumer markets. As society shifts to an online life both for work and pleasure, businesses will need to adapt to meet their needs – almost every company will need to be a “technology” company. The progress that has been accelerated by COVID-19 is highly unlikely to reverse after lockdown, so those organisations that put digital first and innovate to permanently replace the in-person elements of their business will gain a significant advantage.
If your business has undergone or is part way through a digital transformation, whether due to the pandemic or not, we’d love to hear from you.