Mobile World Congress

Don’t count out the incumbents just yet

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The digital giants’s industry disruptions may be making headlines, but many of the more than 12,800 executives of incumbent companies surveyed in IBM’s newly released Global C-suite Study are fighting back—and some are packing quite a punch.

The key is that these incumbents aren’t simply digitizing their businesses. Instead, they’re responding to massive changes in their industries with fundamental changes in their own organizations.

AT&T, for one, is transforming its business backend processes with microservices. Maersk and Walmart, meanwhile, have embraced blockchain technology. Across industries, companies are moving up the value chain, reinventing business processes, and optimizing customer service and customer experiences. Most importantly, they’re changing their company cultures to encourage experimentation and innovation.

Here are some of the study’s key takeaways:

Incumbents are striking back

The first wave of disruption from digitally-savvy upstarts, it seems, may have reached its zenith. Now, our study finds, executives are more concerned about the disruption presented by innovative incumbents within their own industry than that presented by new entrants. In fact, 72 percent of C-suiters say that those incumbents are actually leading the disruption in their industry.

“You need to reimagine and digitally reinvent your business. The people increasingly doing this will be the incumbents and they’ll be the ones increasingly winning in the future,” said IBM Services’ Saul Berman at the study’s launch event at Mobile World Congress 2018.

Platform business models are on the rise

Digital giants like Amazon and Alibaba struck it big by adopting the platform business model, an approach that allows companies to dominate their market segments and easily scale in new ones. Now, organizations of every kind in every industry are investing in platforms. Our study finds 46 percent of organizations, are either investing in or considering the new platform business model.

“The question is whether you want to be an orchestrator of new platforms or just a user, a follower,” said Cemex’s Luis Hernandez Echavez.

It’s not just skills it’s culture

 What do companies get when they add fast failure, rapid innovation and constant experimentation? According to our study, it’s a recipe for success. But simply acquiring a litany of digital skills in their organization isn’t going to get them there, we find. Only by leading from a position of trust and introducing agile methodologies—in essence, by changing the culture of the company to let teams take the lead— can true and lasting innovation take root. According to the study, 7 in 10 executives whose companies have outperformed their peers in both revenue growth and profitability over the past three years are empowering their teams this way.

“The organizations prospering aren’t waiting for the next tech, the next innovation,” Berman said. “They’re trying to lead the way, they’re creating a culture of perpetual reinvention.”

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