Digital Transition: Will your business make or break?
43% of established businesses underestimate the consequences of digital disruption in their industry. 80% of them will not survive until 2020.
Too many businesses think they are safe and adopt a ‘wait and see’ approach, which will ultimately prove to be their doom. The narrative ‘it is not happening to us’ is all too tempting to believe. The secret is to monitor the underlining drivers not just the financial performance (although profitable, it is growing sluggishly).
It is time to start prioritising survival, not just sustainability and growth. When creating your roadmap, you need to focus on 3 key questions that will make or break your business:
What is really happening in your industry?
Do not only benchmark sales and revenue with your competitors. Monitor regularly the ‘how’ of their activities: do they have new operational processes to boost efficiency? What are the new channels they are using to reach customers and interact with them? What are they doing differently?
This information will give you an idea of the rate of digital disruption in your industry and where you currently stand. This is a perfect starting point as it will determine your strategy: for example, if you are in the early stages of development in a fast moving industry the best strategy is to partner so as not to lag behind. However, if you are in the mature stages of digital development in a slow moving industry, you are in the lead, but be careful not to keep in tune with your market to ensure they are ready for your innovations.
What are the gaps in your business?
You will need to review your current strategy to assess if it is adequate and scalable to help you respond to digital disruption successfully. If not, what needs to change? Compare your business with the most innovative business in your industry: what can you learn from their model and need to implement? Go back to basics – how money is made in your industry. You should have the economic understanding about what is likely to change and why. You may find that customers demand new experience or that that your leadership team is not keen on new ways of doing things. Maybe your employees are not ready to embrace new approaches and make bold experiments? Maybe your business does not have the skills and capabilities required in the short, medium and long-term to execute your plan for survival? To be successful, you need to take actions right now and make survival priority, not just profit and revenue.
Build the momentum now: how quickly can you bridge these gaps?
You now have all the information and a robust strategy – but when it comes to execution, don’t sabotage it by procrastinating! Act boldly and commit to supporting experimental ventures. Do not look for efficiencies only, look for radical experimentation. This will build the momentum and ensure your survival tomorrow!
To build this momentum, you will need to be resourceful and crafty on bridging the skills and capabilities gap in your business: if it will take too long to build, who can you bring in to help you? Are there experts in this field who can accelerate and smooth your digital transition?
Let’s do it now!
Digital disruption is coming not only from your own industry but from the adjacent sectors too. You might not even be aware of them! It is time to prioritise survival of your business over its sustainability and profits. You need to act right now to prepare for the unavoidable disruption in your industry.
Not sure what to do next? Take the BMIM digital development assessment here to find out where you are on your digital transition journey!