At Forrester’s 2018 Digital Transformation forum, speakers shared 5 tips for avoiding digital disruption.
Change is inevitable: 75% of the S&P 500 firms from 2011 will be replaced by 2027. That was an overarching message highlighted at Forrester’s 2018 Digital Transformation forum in Chicago last month. Themes for survival: move fast, be fearless, embrace flexibility.
Several would-be fast, fearless, and flexible companies from a wide range of industries took the stage to share insights on their digital evolution, for these five takeaways:
1. Incumbents, it’s time to flex your muscle
Established companies are understandably concerned that the next hot startup will disrupt their industry. But they’re also well positioned to reinvent themselves. Incumbents have an edge, with deeper pockets, large sets of customer data, and existing relationships. A retailer wanting to test changes to its website, for instance, can draw on their troves of data to conduct more effective A/B tests to determine which version performs better. Artificial intelligence tools can also run better when powered by more, high quality data.
2. People power technology
While technology drives change, a company can only implement that change by empowering its people. After all, employees will be the ones required to use the technology to do their jobs. What’s the good of an AI tool that predicts customer churn unless a salesperson can take advantage of that information to stem the churn, for instance?
Companies are more likely to succeed when they:
- Elicit employee input before implementing new technology;
- Provide incentives for employees to incorporate technology into their work, and;
- Offer training that makes implementation enjoyable.
3. Fail fast and learn from it
With the rise of private-label products, customers are becoming increasingly brand-agnostic. To compete, digitally savvy companies are testing and learning, often in real time. They recognize that mercurial customers have the upper hand when it comes to choice. So they try new ideas, even if that means those ideas might fail. Failing is acceptable, so long as it yields lessons. The freedom to experiment and share lessons sets winners apart.
Carmax, the used car retailer, for instance, understands that digital maturity is about getting through bad ideas quickly in order to get to the good idea. Leadership has recognized that the company has to shock itself into action from within. The company has streamlined decisions, leading to more than 30 new website releases a week, up from one release every 6-to-8 weeks.
4. Prepare for the unexpected
Nimble decision-making is the hallmark of agile startups. More traditional companies, with layers of approvals and multi-step processes, can’t always keep up. In today’s hypercompetitive environment of rapid rollouts, however, nimble decision-making is essential. If a company learns that customers are using a product in new ways, for example, the best-case scenario requires an adjustment to support those new use cases.
Estée Lauder, the beauty product company, did just that when it saw that customers were using their mobile app in the store to pare down product decisions. Originally created for customers to “try on” products remotely, the app was so efficient that customers started using it at make-up counters to create a short list and then try on the final few selections.
5. Handle digital progress responsibly
As new technologies become available to companies, they also become readily available to individuals. Unfortunately, those individuals might not always have the best intentions. The more digitally progressive a company becomes, the more correspondingly susceptible that company becomes to threats from malicious actors. Preparation for this eventuality becomes imperative. Meanwhile the essential question for any new technology always remains: How is this benefiting the customer?
In such an unpredictable business climate, companies that wish to gear up for the future of their industries would be wise to adopt strategies that emphasize:
- Taking advantage of existing strengths;
- Empowering employees to leverage digital tools;
- Celebrating experimentation and failure;
- Embracing the unknown, and;
- Treading cautiously amid rapid innovation.
While challenges abound--some even worrisome--leading companies are rising to meet expectations by focusing on the opportunities ahead.
This blog post was originally published on PwC's 365 mobile app on June 18th, 2018.