The thirteen management lessons to draw from digital disruptors

23 November 2017 Consultancy.uk

As industries across the board brace themselves for an era of constant change, a new e-book by two experienced management consultants sheds light on what organisations can learn from digital disruptors to future-proof their own strategy and operations. Leveraging insights from the best practices of companies such as AirBnB, Netflix, Spotify, Uber and Zappos, authors Salem Samhoud and Mara Soekarjo have distilled thirteen key lessons.

Innovative digital technologies such as cloud computing, automation, artificial intelligence and machine learning are impacting organisations across all industries. One of the starkest examples of disruption comes from the banking industry.

Traditionally, dominant entities are often able to trace their roots back centuries, having weathered various storms, including a global financial crisis largely attributed to their policies, along with continued arrivals of various new competitors, from credit unions to internet-only banks. However, thanks to the age of digital disruption, traditional bankers now face a new era of competitive pressure, some of which has been projected to cut deep into the market share that they previously relied on. As a result, the industry is increasingly tapping into the emergent FinTech scene, in the hope that by co-opting new financial technology rather than competing with it, banks can preserve their customer base. 

The thirteen management lessons to draw from digital disruptors

Indeed, while investors were initially hesitant to back new technology, for fear of what disruption its development might cause to the market, many CEOs are now using technology to their advantage. While around 40% of CEOs see technology as a risk to their business, companies are determined to utilise innovation to negate global uncertainty regarding key changes such as Brexit. 74% of British organisations now say that they are investing in innovation themselves rather than waiting to be disrupted by competitors.

The availability and application of new, disruptive technologies is evidently changing the world, with major consequences for the way in which organisations will structure their operations in the future. To help clients prepare for the tumultuous environment of digital disruption, international management consulting firm &samhoud has published an e-book, aimed at accelerating the restructuring of businesses’ internal structures.

One vision

The book, titled ‘13 Lessons from Digital Disruptors to make your Organisation Future-Proof’, was penned by the duo of &samhoud founder, Salem Samhoud, and Mara Soekarjo, a consultant who joined the firm in 2014. The 48-page dossier describes what digital disruptors are already doing as a catalyst for their success, before providing readers with inspiration and advice on successfully preparing their organisations for the future.

The volume divides the 13 lessons into a quartet of segments; ‘Vision’; ‘Customer centricity’; ‘Agile steering and execution’; and, finally, ‘Culture, leadership and technology’. The first – and shortest – ‘Vision’, consists of a single lesson: ‘Believe you can change the world’. While the lesson may seem obvious, it is often easier said than done. The authors cite AirBnB as a key example of a company that believes that it can change the world. This online marketplace for short-term housing and hostels was founded in 2008 – and while it might have aimed to ‘break’ the hotel industry more immediately, CEO Brian Chesky has asserted his belief that the site’s match-making service for hosts and clients goes beyond making money, bridging cultural gaps and promoting openness and inclusivity. Chesky even admits that, after the Paris terrorist attacks in November 2015, he had hoped that people might learn to understand each other and different cultures better through AirBnB experiences, helping to prevent conflict in the world.

Customer centricity

The second segment of &samhoud’s publication, ‘Customer centricity’, focuses on how digital technology can help enhance the experience of the life-blood of any business – the customer.

The first lesson of the chapter is to adopt complete and utter customer centricity, making it an integral factor in workplace and business culture. According to Salem Samhoud, “Digital disruptors have completely immersed themselves in the mind and ideas of their customers and look in-depth at what they truly want.”

An example outlined in the chapter is the major commitment to customer centricity of online shoes and clothing store Zappos, a retail industry disruptor that also focuses on the ultimate customer experience. The retail sector is currently struggling to transform in order to deal with a number of digital disruptors such as Zappos, whose customer focus includes 24/7 chat support, with the longest conversation in their customer-service department’s history currently standing at a marathon 10 hours and 29 minutes. 

lessons from digital disruptors to make an organisation future-proof - part 1

In order to further get to know customers, the book’s next lesson is that companies should make use of digital data to get to know their customers “better than they know themselves.” Social media has provided a ready-made, and often free-of-charge networking service, that can enable companies to poll and interact with their client-base with the greatest of ease, while making the process enjoyable for customers and businesses alike. 

From here, the book recommends that firms identify one clear customer need on which the customer journey is built. Following the selection of this clear need, businesses should map out the end-to-end process to explore how customers could most easily obtain this result, before this customer journey is used to improve User Experience (UX) design, among other aspects of a company’s web-presence. Disruptors test, observe, analyse and prototype to create the ultimate experience at each step of the customer journey.

Speaking on this particular finding, Mara Soekarjo said, “Only if you focus your product on the ‘jobs that your customers need to get done’, your company will thrive. Digital disruptors do this, as it allows them to invent truly innovative and out of the box solutions, rather than providing general solutions because they wish to accommodate their client in every way.”

Following on, the final lesson of the chapter recommends that clients organise their operations based on customer journey rather than on silo functionality – making for a bespoke platform that will best engage those investing in their products.

Agile steering and execution 

The sixth lesson of the book, and the first in the ‘Agile steering and execution’ segment, is to focus and steer in the short term. Returning to the question of a firm’s internal structure, the authors contend that in a world of disruptors, in order to avoid being left by the wayside by new and rapidly adapting competitors, companies must operate in an ‘agile’ manner. Returning again to the example of AirBnB, the document highlights how the ‘hyper-growth’ model of companies geared to compete amid disruption means that their operations must be fluid enough to adapt to new needs. New stages of development and growth require new skill-sets. Therefore, companies in this mould plan for the short-term, even in terms of human resources and staffing, enabling them to respond quickly to changing priorities while keeping the company’s overall ‘Vision’ in mind, which is essential to avoid losing direction and cohesion.

Lesson number seven sees a continuation of this theme. Companies looking to emulate disruptors must execute ideas quickly. Justifying this, Samhoud said, “The reason for this is simple: in a disruptive market, it’s all about being the first to execute an idea. And being the first is often more important than getting it completely right the first time. You need to be faster than your competitors, or your customers will go somewhere else. Companies therefore release their Minimum Viable Product as quickly as possible.”

The exemplary disruptor noted here is Dutch ecommerce firm, CoolBlue. Examples of CoolBlue’s quick execution power can be witnessed when examining the opening of physical ‘bricks and mortar’ stores by online retailer. When consumers asked to pick up products in a physical location, as opposed to having them delivered at home, the company quickly obliged in order to retain their custom.

Finally, completing the third chapter, the book states companies must iterate, test and experiment, in order to succeed. The authors state that these last two approaches go hand in hand, and the book makes use of another ecommerce platform to illustrate this. Experimenting continuously has produced more and more ideas for online supermarket Picnic, according to CEO and co-founder Joris Beckers. Ultimately, it does not matter if companies fail with their first attempt, as every failure helps the next stage of new ideas. 

Lessons from digital disruptors to make an organisation future-proof - part 2

Culture, leadership and technology

The final chapter of ‘Culture, leadership and technology’ understandably focuses on the best ways in which the upper end of a business can implement change in order to match disruptors. First off, readers are instructed to foster a creative and entrepreneurial organisational culture. On top of the earlier assertion that customer-centric culture is king, the paper notes that having a creative entrepreneurial culture and mind-set in your organisation is “the key element” that enables everything else. Emphasising this finding, co-author Soekarjo said that digital disruptors focus on these features as innovation simply does not occur without them, stating that “Digital disruptors therefore seem to pay specific attention to their culture. Creativity includes thinking out of the box and coming up with unusual ideas that truly help your customer. Entrepreneurship is more about assertiveness, carrying out ideas and getting things done.”

An example offered of just how to foster this company culture is that of Bol.com. When it comes to building entrepreneurial confidence, trust is key. Leaders can build this trust by openly talking about their own mistakes and allowing employees to feel safe to do the same. Afterwards, leaders should help to solve these problems as opposed to reprimanding staff, and help take the company forward as one. In addition, Michel Schaeffer, former Bol.com marketing director, is cited, explaining how the board of directors of the company gave compliments to everyone who highlighted problems and mistakes when they were trying to solve a crisis with a project – further encouraging a pro-active work-ethic and a culture of innovation among staff.

The second lesson of the segment seems comparatively straight forward. Companies are encouraged to gather the right leadership team. While this may seem like stating the obvious, it is a step that a number of outfits fail to execute. A charismatic leader is central to the success of a firm, as they are often hyper-energised by their ‘Vision’, being the individual who best understands it. it is also clear that the top dog makes a company work. Digital disruptors truly have the best teams leading their organisations and pay specific attention to building a diverse team of diverse talent. Leaders should not be intimidated by top talent, with the paper citing Ed Catmull of Pixar, who once stated that he always tries to find people who are smarter than he is. 

Using “the right technology in the right way” follows as the next lesson. While this may seem a daunting task to business leaders of a certain generation, set in the traditional ways that have succeeded before, the publication notes that many digital disruptors are not actually founded by someone with a technical background. However, technology still obviously plays an important role in how disruptive companies can be – to the extent that market incumbents can simply not afford to avoid digitisation any longer. Innovative technologies including robotics, (digital) biotech, Blockchain, developments in cybersecurity, and so on, can all be leveraged to decrease expenditure, increase security or regulatory compliance, and even improve time management and workflow. 

Utilising this technology is not without its pitfalls, however. The penultimate tip advises companies to be ready for the ethical dialogue around technology with society. With the looming implementation of the GDPR set to ramp up scrutiny on how consumer data is harvested and applied, and cloud storage currently at the centre of a number of cybersecurity storms following deployment by the likes of Deloitte and Accenture, simply employing new techniques without preparing for negative eventualities of any kind is a sure fire way for businesses to find themselves in hot water. Public scrutiny of this kind, if not properly handled, could have a major impact on sales, and drive consumers into the arms of competitors.

Finally, the document encourages firms to think holistically in terms of ecosystems. Passing comment on this final point, Salem Samhoud said that companies should not think of themselves as operating in a bubble, concluding, “The lesson learned is to always look at your organisation in relation to its context. Accept the fact that you have interdependencies and try to see how you can take advantage of this position. Try to use the power of the networks that you are in and see if you can leverage them to improve your company.”

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