For just over a decade now the digital age has dramatically altered and accelerated the pace of technological growth, innovations, user adaptability and the way information is shared. The world has seen massive growth in new technologies and businesses that’s pushing the boundaries of normal competition. The speed with which new technologies are being adopted by users, and how user needs constantly shift has dramatically rocked and disrupted incumbents. In a very short period of time many industries have been caught off-guard by competition that weren’t on the incumbents’ radar. In fact, some of these disruptors didn’t even exist too long ago.
The exponential change the world has experienced in the recent years has been so rapid that most organizations haven’t been able to cope with it. In the list of Fortune 500 companies of 1955, only 12% exist today. And that massive decline isn’t slowing down either. Today, startups are fast gaining traction and gaining larger market share, higher share prices and total equity than companies that have existed for half a century or more. You could say, it’s the golden age of disruptors!
Where These Disruptors Roam
In the automobile industry, GM, Ford, Toyota and VW have enjoyed a global stronghold for close to a century now. And while they’re still major market players, disruptors like Uber and Tesla (startups that didn’t exist 14 years ago) have crept in to alter people’s perception and needs from the automobile industry. Sure, Uber doesn’t manufacture vehicles, but it has altered the way people commute. And even if Tesla is producing cars for a niche market, it’s only a matter of time till it expands and eats into the market share of automotive giants. Plus, Tesla has been a major disruptor in shaping consumers’ perceived needs of their vehicles. It truly has gotten major automobile manufacturers scratching their heads.
Similarly, disruptors have rocked the communication industry as well. In 2013, Verizon CEO Lowell McAdam, stated “if you allow unlimited usage, you just run out of gas”. However, just last month Verizon, the largest wireless communications provider in USA, announced its unlimited data plan to fight off competitors and meet consumer demands. They had to give in. A decade ago, in 2007, Blackberry was at a high point with its mobile devices that offered cutting-edge messaging services, enjoying a peak share price of C$241.90. Today it’s trading at C$9.03! At the core of its decline was its inability to adapt and evolve quickly to changing consumer demands. During the same time that Blackberry was nosediving communication application WhatsApp was born (in 2009) and in a matter of just 5 years was valued at US$19.3 billion by its acquirer, Facebook. Let’s not forget, Facebook itself is just 13 years old with an equity of US$59.2 billion. Compare that to IBM, a pioneer in computing, a multi-technology giant and in existence for 106 years, that has an equity of US$18.2 billion.
There’s also been a huge shift in how users choose to be entertained. For the large part of the 90’s and up till the mid 2000’s, Blockbuster was USA’s larger provider of video rental. In 2010 it filed for bankruptcy, largely due to its rigid strategies that prevented it from adapting to consumer needs and embracing the digital age. Also, at play were disruptors like Redbox and Netflix (the latter which Blockbuster turned down to purchase for US$50 million in 2000 and is currently valued at US$2.7 billion!). Netflix itself has evolved from video streaming to producing its own content, and quite successfully.
Survival of the Agile
Consumers today, are driving the market like never before. It’s a highly competitive and ever changing world and organizations have to remain agile, flexible and innovative to continue their growth trajectory.
Among the several organizations that have brilliant strategies to embrace the future two stand out – Google and Amazon. And that’s mainly because of their ability to not only creep in, disrupt the market and rock the incumbent, but also to be agile, attentive and adaptive. They’ve constantly maintained a pulse on users, and not just on what they’re demanding. In fact, these two organizations have stayed ahead by observing cultural trends and how people behave and then reshaping behavior around their products and services. Embraced technology is just a small part of it. Expanding beyond your scope, your current competencies and abilities and having a stake in the full cycle of users’ lives is what’s empowered them. Basically, what drives organizations such as Google, Amazon and others like them is their Massive Transformative Purpose.
Here’s a perspective on the impact of disruptors in the current world. How is it that a bookseller was present at the Academy Awards a few weeks ago? In 1994, Jeff Bezos started Amazon.com selling books. It pushed incumbents like Barnes & Noble against the wall, but he didn’t stop there. Today, that same company has evolved from being an online retailer to innovations like Kindle ebooks, cloud computing, video and audio streaming, the entertainment industry and artificial intelligence (Echo). There’s a very slim chance Mr. Bezos will stop here!
Google has approached its expansion in a different way. It has absorbed technologies and companies to build upon its vast reach and strength allowing it to further strengthen its abilities. What started as a free search engine is today a giant that has an arsenal of over 200 acquired companies and valued at US$139.04 billion!
Disruptors have forced incumbents to rethink their strategies and business models. The main driving force behind these disruptors – technology and evolving consumer needs. Agility and adaptability are paramount for organizations otherwise they’ll see their rapid demise.
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