Your 3 Step Guide to Digital Disruption
#WTF – What’s The Future?
The saying goes, “Disrupt yourself before someone else does”, but without an understanding of the trends in both industry and technology, or more importantly, a robust plan of action on how exactly how to “do disruption”, the advice is nothing more than another cliché.
So, in order to get you prepared for what’s being termed the “Fourth Industrial Revolution”, we partnered with disruption expert and host of Cliffcentral’s Futurology show, Michael Cowen, for a Webinar where we discussed the shifts occurring in Africa and the world, and how companies can go about adapting to the radical changes our world is facing.
- Your Customer is Changing
A changing customer in 2017 brings four important elements into play: ongoing value, personalization, real-time and experience.
Peter Drucker said that the point of your business is to create happy customers. It’s not only about profit because profit comes from happy customers. You need people to buy your product or service to create customers and you need them to be happy. This means providing ongoing value.
The time and attention that people give you is the greatest commodity that you can acquire as a brand or company. The customer today is living a life that is constantly changing and so they are constantly looking for what is evolving with them. The advanced technology that has become a reality for many customers; artificial intelligence, augmented reality and machine learning, have made it easier for these consumers to stay connected, and for us as brands to hold their attention through personalization.
This also brings into play real-time. Real-time is easy with big data – it allows us to engage directly and connect with consumers in different ways.
Finally, it brings the experience into account.
Put yourself in the position of the consumer for a moment. Can you name five companies off the top of your head that you can immediately and genuinely say “Yes! That company makes me extremely happy/provides me with the most memorable experience everytime.”
You may think of Google, Facebook or the other great tech companies. You may think of Coca-Cola. But not many people can actually name five brands who provide an experience that they are wholeheartedly content with.
- Your World is Changing
There has been a dramatic shift in the way the world works, specifically over the last thirty years. Looking at the global inequality figures is a good way to examine this. There are eight people who earn as much as the bottom half of the entire world’s population. This just shows the degree of extremities that we are now operating in.
There is a fundamental shift in the broader socio-political environment that we live in. It gives rise to forces like Brexit that rise from an absolute frustration with the way the world exists, the role of capitalism is changing, and investor’s attitudes towards South Africa is vastly different today to what it was at the dawn of our democracy.
- Economic Instability
Economic instability has almost become the new norm – we are becoming used to it in our own country, and we are seeing it across the globe too.
Corporations often have large amounts of money in their bank accounts but are afraid to spend it, particularly in South Africa, where the economics and politics are so unstable. Then your business comes along and tries to make a sale to these people or companies that are unwilling to spend – it makes doing business increasingly more difficult.
This can be explained by looking at the GDP rate. The ratio of private debt to actual GDP in many leading countries around the world is alarming – most of them are over 167% this year, meaning they owe 167 but only earn 100. This is troublesome.
Cowen went on to discuss how he sees two different types of start-ups. One is fundamentally a financial instrument. This start-up will eat your pipeline, extract every bit of value for the single opportunity to list themselves on the Stock Exchange for a few people to make a huge amount of money. The other is a little more sustainable and a little less aggressive.
The bottom line is that our society is experiencing a “startup boom” and organizations need to be aware that there are ambitious, inventive and hungry start-ups coming for them. Organisations need to be aware of these new challenges and pressures.
- Change is Coming Here
In the last 15 years, 52% of the Fortune 500 companies have disappeared. The dramatic shifts occurring across industries and borders have led to many of the major enterprises a decade ago having to close doors in 2017. The demise of “traditional” industries like the manufacturing, construction and agricultural sectors, has given way to innovative technology companies that now seem to be plentiful. This is the reality of 2017.
We can all agree that companies are better off becoming cloud-centric, data-driven and tech-savvy. But that needn’t mean they become a tech company. It just means being aware of the changes happening, and having the ability to adapt to them. The need to transform has never been more pressing.
- The Big Q
How does one future-proof a brand or business? What is the process you need to go through? There are two main pillars to this question.
- The ability to respond to your customer’s needs. Right. Now.
Evolve and refine your business model to stay relevant to a pool of consumers that are essentially growing your business.
- The ability to implement new ways of work.
We live in an age of real-time data and you need to be able to take action on that data as it happens. Take every touchpoint as an opportunity to learn more about customers.
These two factors are defined by your ability to transform. And herein lies the challenge. A smoker becomes addicted by repetition and association and to kick that habit they often have to replace it with another. Similarly, a company that wants to transform themselves after many years of the same structure can also face the challenges of adaption. “Be under no illusion,” Michael Cowen warned, “transforming oneself is a long, hard, tough road. But it’s a very rewarding journey. Let’s break it down into three digestible steps.”
- The Three Steps to Disrupting Yourself
On the two axes, we have our two pillars: the ability to respond to your customer’s needs and the ability to implement new ways of working. Within this model, there are three areas we need to focus on: refine, refocus and reinvent, all with entirely different strategies. When you look at a structured approach to transformation, you want to put, as a guideline, about 70% of your efforts into refining, 20% into refocusing and 10% into reinventing. Here’s why.
Refining is less about transforming and more about becoming faster, cheaper and better.
An example would be replacing your call centre lifeline with a bot centre. Doing this can simplify your call centre structure, probably improve your customer service and create a more efficient process. The refinement process is about optimization and learning new skills and capabilities, and not necessarily about transformation yet.
Refining allows you to build a moat around your business to protect it from competitive start-ups that want to steal your market share.
Refocusing refers to how a company still solves the same problem for the customer, but how they go about doing it changes.
Adobe, for instance, used to sell their software on CD packs as a product sale. Today, they have moved everything across to the cloud – they have developed a SaaS model upon which they’ve built a subscription model. The emphasis with refocusing is on building sustainability.
When we look at reinventing, we look at fundamental transformation.
We’ve all seen a search engine move into an innovator of driverless cars, with household name, Google. By doing this, they are moving into industries that are previously untapped, thus future-proofing the future and ensuring their long-term growth as a company is sustainable. Who knows how long search engines will be around for? But Google understands that driverless cars are certainly in the attainable future.
- How are you competing in competitive market spaces?
On a South African front, FNB is a bank that is driving the idea of innovation. The Steve ads were part of one of the country’s top marketing campaigns, they created quick and easy sign-ups and they improved the overall customer experience. But they’ve moved into the Telco space with FNB Connect, which isn’t an untapped market and is highly saturated in South Africa and across the globe. It’s likely that they will run into challenges as it is not a future-proof strategy. FNB optimized the Refine strategy, but haven’t quite cracked steps 2 and 3 of disrupting themselves. We ask them, then, where to next?
Safaricom owns M-Pesa which is an example of a telco company becoming a bank, unlike FNB, where a bank is attempting to transform into a telco business.
Another example is how Naspers, global internet and media group, started Multichoice, who was one of the first pioneers of satellite television. Multichoice were able to hold their numbers and their position as global leaders for years. But trends are changing – more and more people are streaming instead of watching television. They have since come out with Showmax, Netflix’s biggest competitor. Whether they take over the market space or not, they have certainly done what they can to future-proof their business. Today, Naspers is one of the most valuable companies on the continent.
- 3 Key Takeaways
- Check with your customers: Don’t just ask them to check the UX, ask them if they want the product before you make your move.
- Build proof points: This is not a simple or quick process, but vital, especially with so much change occurring around us.
- Be curious: Continuously explore and continuously understand.
To answer the question, “What’s the Future?” or #WTF?
The future is now.
Contact Meltwater Africa today to understand how you can track changing trends and evolving industries, in order to stay ahead of competitors and future-proof your business.