The rise of the digital economy has left businesses with two choices: adapt or risk becoming extict. It may seem like an easy choice, but according to the statisics, 88% of Forbes 500 firms from 1955 were extinct by 2014.
Now more than ever, businesses face competition from pioneering technologies, hot new startups and the impact of digital transformation. Disruption is the new normal.
Navigating Digital Disruption
New business models and innovative technologies are transforming the way corporations now engage with their clients, customers and partners. This means they need to invest in technology, hire talent, and become more agile when working across distributed teams all over the world.
The video below explains the lifecycle of digital disruption.
Source: McKinsey & Company.
The Next Generation Of Innovators
Cutting-edge companies such as Telsa, Netflix and AirBnB have emerged as the global players, completely disrupting traditional business models within automobile, entertainment and travel industries.
These companies represent a massive threat to leading global organizations, and CxOs and senior business leaders need to innovate their existing business model or risk becoming extinct (a la Kodak, Blockbuster and Borders).
Cities across the world are becoming hubs for dynamic and innovative startups that are embracing technology and using it to slice open all the major markets: banking, retail, insurance and media – the list goes on.
Finance - Transferwise
Transferwise, a true disrupter founded in 2014, enables customers to easily transfer money between countries without any hidden charges. The startup boasts it can reduce the cost of these transfers by eight times. Such is the success of this once tiny startup that it is now valued at over $1 billion and facilitates over 600,000 transactions a month.
Retail / eCommerce – Shopify
Shopify is another great success story, but this time in the world of e-commerce. Again valued at over $1billion, the company helps small to medium-sized businesses open and manage online stores. Shopify has made it simple and cost-effective for businesses to go online, and as this attracts more customers, their technology becomes a commodity and their business model becomes more economical. With a 95% revenue increase year on year, the results speak for themselves.
Insurance – Lemonade
Lemonade markets themselves as the world’s first Peer-to-Peer insurance company. The firm is trying to tackle the amount of fraudulent claims in the industry as well as reduce premium costs. Customers choose a charitable cause they care about and any money not paid out in claims is donated to their respective causes, unlike in normal insurance firms where the money is usually kept for the insurers themselves. Making full use of mobile technology to give a seamless user experience and having already received $13 million of funding, Lemonade is one of many new InsurTech firms that are disrupting the industry and putting the larger firms on the back-foot.
Riding the Wave of Digital Disruption
Many corporates recognize that change is happening (with or without them) and are proactively collaborating with digital disruptors to bring new products to market. For large organizations, fostering digital talent, developing innovation programmes and acquiring new start-ups, are all initiatives that pave the way for digital transformation.
Unilever & Dollar Shave
In recent months, Unilever has successfully innovated in a market where many of the major players, such as Proctor & Gamble, are struggling to grow. The company bought Dollar Shave Club, a subscription-based shaving company that grew hugely in 2015, for $1 billion.
“Unilever is simultaneously entering new, adjacent categories, blocking its key competitor from acquiring and neutralizing disruptive players and acquiring teams and tools to position for the next decade or longer,” says Keith Anderson of e-commerce analytics company Profitero.
Through moves like this, and its acquisition of Seventh Generation, Unilever is connecting to its customer base through digital means, investing in digital talent and being innovative with their products.
JP Morgan and InvestCloud
JP Morgan has committed to spending $300 million over the next three years on digitally improving its asset management, and this includes its recent deal with InvestCloud. The aim of the deal is to provide its customers with a better service through mobile apps and easy-to-use web dashboards – all at lower costs. InvestCloud is not the first of these ventures and JP Morgan takes great pride in its investments in the FinTech community, claiming to have worked with over 300 startups in the last two years. Working with such companies allows JP Morgan to take advantage of these innovative technologies and create alliances with those that could otherwise grow to be competitors in the future. Fundamentally though, the bank is engaging with its customers in new ways and that is at the heart of its digital transformation.
The Pathway To Innovation
Transforming a company to cope with the digital age is a complex process, and at the heart of the task is re-connecting with consumers who are now digitally engaged and expect more than ever - simply buying new technologies or updating legacy systems are only partial solutions. For a company to truly innovate, they need to accept this new paradigm and completely embrace digital disruption - generating improved business models and developing better products and services for their customers.
To stay competitive, large organization must not only generate new ideas, but also share these insights effectively with their clients, teams and partners.
Using a tool like Catalyst helps innovation teams navigate digital disruption - staying up-to-date with market innovations and remain curious in their day-to-day roles.
Our platform enables senior executives to track disruptive technologies, market innovations and breaking news across all their information sources, so they can drive lead generation, client engagement and become more effective in their jobs.
Get in touch via firstname.lastname@example.org to learn how you can track innovation today!