If you asked an executive a few years ago to name the source of disruption in her industry, she’d likely point to a digitally-savvy newcomer. But in 2018, that’s no longer the case.
“As innovative incumbents have become smarter about competing in a disruptive digital age, executives now say they represent more of a competitive threat than new entrants,” write Rita Gunther McGrath and Philip Dalzell-Payne in the latest edition of IBM’s Global C-suite Study.
Drawing from interviews with more than 12,500 CxOs, the study’s conclusion is clear: Incumbents are striking back.
According to the study, the key to success for these companies has not simply been digital transformation, but rather digital reinvention. Companies that weathered recent disruptions reimagined their businesses from A to Z for a digital age. Businesses that want to follow their example should shift strategy, acquire new skills, and innovate fearlessly.
Are you ready to lead your organization through the turbulent digital waters? Here are three takeaways from the study worth considering:
Prioritizing personalized customer experiences
In retail, healthcare and financial services alone, personalization will drive a revenue shift of $800 billion to the 15 percent of companies that get it right, according to the study. But crafting highly personalized customer experiences is no easy task.
“The design of the experience requires deep understanding of what makes individuals human – the motivations, desires, temperament and in-the-moment moods of customers,” Joerg Niessing and Robert Schwartz write in the study.
Which organizations are doing personalization best? According to the authors, it’s those that approach data as a way to better understand their customers’ needs.
Weighing the platform business model
The promise of faster revenue growth, higher profits and better connections with customers makes adopting a platform business model an alluring proposition. That’s why just about half, or 46 percent, of organizations surveyed in the study are either investing in or considering a platform business model framework.
But such a model is not a silver bullet. For platforms to succeed, our study finds, platform operators must allow all parties to contribute to customer experiences and they must leverage the data those platforms generate to drive innovation.
Owning a platform may not be the best choice for every organization. But all executives have to decide where they stand on the matter soon, our study proposes, and act strategically.
“The choice – whether to own or participate in a platform, or do both – is not something organizations should postpone,” Yoram Wind and Shanker Ramamurthy write.
Changing the culture
Making big changes in your business starts with making big changes in company culture. And according to our study, the most important one concerns the balance of power.
“Ecosystems are shifting the balance further away from top-down control and toward autonomy. Teams, once locked in place, now assemble on the fly and move in a flash from new insights to smart experimentation and consequent action,” Amy C. Edmonson and Christine Wyatt write.
When organizations become more agile, their teams can become better problem solvers and experimenters. In a digital age that never stops changing, that kind of flexibility and nimbleness is crucial.
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NRF 2018 is all about retail transformation. But which roles in the retail world are driving that transformation? And how are they doing it? The answer, of course, is that all retail roles—from marketing to store operations to supply chain—have a part to play in the reinvention of the industry. For more on the Internet of […]
NRF 2018 is all about retail transformation. But which roles in the retail world are driving that transformation? And how are they doing it? The answer, of course, is that all retail roles—from marketing to store operations to supply chain—have a part to play in the reinvention of the industry. For more on supply chain […]