No sector is safe from digital disruption – just ask the taxi industry following the unstoppable rise of Uber as its competitor. Now white-collar professions such as accounting, banking, financial advising and even the legal profession are considered vulnerable to digital competitors. How can you help your business survive digital disruption, or better yet, become a digital disruptor itself?
1. See disruption as an opportunity for entrepreneurs
Don’t view digital disruption as a closed door for your business. “Human beings have unlimited wants and desires,” says Robert Tercek, a United States-based digital media consultant. “What we have to do is create new opportunities for some entrepreneur to come along and create a new ‘want’. Our capacity to invent new desires is unlimited, and robots can’t do that – that will never be automated.”
2. Retrain your workforce
Instead of trying to recover lost jobs, we should be retraining our workforce and freeing labour to migrate quickly to the new jobs, says Tercek.
“Every company will become a software company, and every industry will be instrumented and measured,” he predicts. “The first companies to adopt this will get an advantage, and start to get good at this and develop the internal skills.
“Other companies will defer the investment, or say this is not their expertise. Those companies won’t go out of business overnight, but they will become less relevant. They may be mainstream today, but they are going to get moved to the periphery,” he says. “The number of hours that people spend in digital environments continues to go up every single year. We now spend more than 10 hours a day in front of digital screens.”
3. Get close to your customers
Megan Brownlow, the editor of PwC’s Australian Entertainment & Media Outlook, thinks part of the solution to digital disruption is to ensure that your business is as close to your customers as it can be. This lets you both deliver the experience that will keep your customers loyal, and also to learn from your clients.
“We are moving away from a products-based economy to a services-based economy,” she explains. “And if you think about all these amazing new sharing platforms, they are often about better customer service. And that’s not just being polite to customers, it is absolutely giving customers what they really want.”
Getting to know customers better can lead to new opportunities. While digital disruption has seen the death of some of the big discount-oriented bookstores, says Brownlow, some new, small bookshops are doing quite well.
“They are diversifying along a literary theme and into other products as well,” she explains, citing the example of Urchin Books in Marrickville, in Sydney’s inner west. “It has new books and old books, but also a bunch of literary-themed toys and jewellery and handbags,” Brownlow says.
It’s not so much that the book industry is dying – it is changing. “Writers’ festivals are growing every year and hard-copy book sales are growing at writers’ festivals. So I think that the longevity issue for some businesses might seem like a real constraint, but it shouldn’t,” says Brownlow.
4. Invest in data-driven marketing
Marketing must be properly resourced for a business to succeed. Consumers now have an abundant choice of products, so marketers need access to data that helps them make the right decisions about reaching the right customers.
“Your marketing has to be data-driven,” Brownlow says. “What that means in a practical sense is a combination of data sets that also includes a business’s own data, which might sit in their CRM [customer relationship management] systems, in combination with data from external parties like media companies.
“It is a more granular, sophisticated view of consumers that is going to drive marketing efforts of the future, because consumers have so much more choice.”
5. Build a culture of innovation
Allan Burdekin, director of industry development at Optus, believes any business’s success in the digitally disrupted age will in part depend on its ability to think like a disrupter. And that means building a culture of innovation.
6. Realise disruption is inevitable
Realising that disruption is inevitable, many of Australia’s banks have decided they’re better off if they’re the ones doing the disrupting. Several banks are backing the financial-tech start-up hub Stone & Chalk, while Westpac has invested in disruptive peer-to-peer lender SocietyOne.
One bank that stands out is NAB. In 2009 it launched the UBank online bank, which operates no branches, and it has used social media to recruit customers. Today, UBank holds $15.7 billion of customer deposits and is driving NAB’s growth into new market segments. It is also a testbed for new ideas such as being the first bank to allow 100 point ID verification purely online.
7. Don’t be like Kodak
A ‘Kodak moment’ was the phrase once used to describe a scene worth saving for posterity. Now it might describe the moment a market leader slides into disruption-driven irrelevancy.
Eastman Kodak, the camera maker and photographic film developer, was dealt a killer blow by digital photography which, ironically, it had also invented. The former photographic giant entered into bankruptcy in 2012, and has since emerged as a much smaller company.