The business landscape of today has changed. There are no two ways about it. The digital era is driving this business transformation and it is running at full power. Customers have become more demanding, less loyal, and have shifted their needs and wants. Competition can now come from anywhere in the world and from any size company. Partners now play a vital role for success in the digital market as companies transfer non-core activities to them in order to become lean, flexible, and change-ready. Even the nature of doing business itself has undergone a significant change. Companies nowadays need to posses an omni-channel presence and interact actively with their current and potential client base if they want to have a chance to succeed in the turbulence of the modern business environment.
All those indisputable changes in the market leave little room for doubt – companies need to transform themselves if they are to survive in the new business reality. And we are not talking about minor adjustments and slow incremental alterations – the type that big companies are used to. In order to fit in today’s environment, organizations need to undergo a full-blown root transformation.
Everything from the managers’ mindset and behavior to the way the company threats its customers, partners, and stakeholders need to be rethought and imagined anew with the afore mentioned characteristics of the new market in mind. Furthermore, because of the speed with which changes are happening in the market this transformation process has to be swift and dynamic. Long-running planning and rigid processes – another favorite for big enterprises – will no longer be effective or work at all.
The need for such a large-scale change is obvious. However, by itself it may not be enough. In order to truly conquer the digital era, companies need to be progressive and innovative. There is no room for followers in today’s market. The speed at which the dynamics of the landscape change ensures that. In order to stay ahead, you have to think ahead – simple as that. This raises a different question for big established organizations – are they at all capable of such drastic innovation? When one thinks of the market disrupting products from the recent years in both B2C and B2B markets it is clear to see that none of them came from a large established incumbent. Netflix, Spotify, Uber, Dropbox, Salesforce, Airbnb and many others have all contributed significantly to changing the business landscape and have disrupted the operations of many big enterprises who have struggled to halt their advances.
Why do we exhibit this phenomenon? The large enterprises are the ones with the resources, power, and existing customers. In theory they should lead the innovation wave. In practice however, the reality is different. Large companies are in fact good in innovation. However, the type of innovation they are good at is sustaining innovation – small improvements on their existing products and services. This has proven a successful strategy for them in a slowly developing market where customers need evolved at the same pace as companies produced their improvements. This trend has enabled companies to slowly drift upmarket together with their client base.
Nowadays, however, the rules of the game have changed – everything moves fast and laggards are chewed up and spit out in no time. In this highly volatile and dynamic conditions sustaining innovations are no longer enough but large enterprises have been too slow to react and have continued to do “business as usual”. This has paved the way for startups and smaller companies who traditionally enter at the bottom of the market, which is an area overlooked by the incumbents. From their they can develop their disruptive innovations, which match better with the market requirements. This in turn leads to an explosive growth, which in just a few years can transform the companies into massive success at which time however, it is already too late for the big enterprises to react.
The market has changed but large organizations refuse to change with it. This is the main source of the headaches they have now and will inevitably continue to have unless action is taken. It is not too late. As mentioned before the established players are the ones with the best resources, influence, and power. What is needed is a transformation, which can create an organization that can utilize them to their full potential.