How many of you have heard of American Can Company, Goodrich Corporation or Cudahy? Some of the more seasoned readers here may recall these names from their childhood. These were the industry titans of the 1950s. They were members of the exclusive Fortune 500 club.
But where are they today? Like so many heavyweights from the 1950s, they no longer exist as they once did. 88% of the Fortune 500 firms from 1955 have either merged, gone bankrupt, or altogether fallen off the list. In other words, nearly 9 out of every 10 companies from that have either gone bankrupt, merged with another company, or altogether fallen off the list.
Many of the Fortune 500 companies from 1955 were victims of disruption. They failed to stay competitive as the economy changed and new innovations arose. As Clayton Christensen powerfully lays out in his book The Innovator’s Dilemma, disruptive innovations have been upending industries for decades.
Disruptive innovations can destroy companies that have thousands of employees. Their massive size hinders them from swiftly adapting to technological change. Emerging technologies are a double-edged swords. Companies that adopt new platforms and have the people in place to make them effective can unlock new value for themselves, their customers, and their employees. Those that don’t are at risk of extinction.
Today, the avatar of disruption is digital transformation. Simply put, the phrase captures a slew of emerging technologies that will restructure every industry in some capacity or another:
- AI (artificial intelligence),
- IoT (internet of things),
- SaaS (software as a service),
- Mobile platforms,
- VR and AR (virtual reality and augmented reality),
- Big Data,
- Unmanned vehicles (e.g., drones)
This surging tide of technological innovations will transform most industries in the next decade. Amazon recently completed its first drone delivery. Though still in its infancy, remote controlled drones can disrupt the shipping and delivery business. FedEx, UPS, and United States Postal should be taking note.
What companies need to be prepared for is to adapt these platforms to their business. For example, over half of all Google searches now stem from mobile devices such as smartphones and tablets. What that means for companies is that if their websites are not optimized for mobile access they are in danger of losing a lot of business. In this age of disruption, you’ll need a team within your organization empowered to craft the future of your business.
Similarly, the ability to leverage big data is a necessity for businesses today. Big data allows marketers to understand the behavior of their current customers as well to understand where they can capture other customer segments.
If you don’t know where your customers are or how to connect with untapped markets, big data is one of the most powerful tools at your disposal that you probably aren’t even using. But to do this, you need knowledge workers on your team who skilled at analytics and can synthesize the data.
By drawing on big data, marketers can make “better predictive decisions that inform their future roadmap.” This can help companies understand how to avoid “being disrupted” and “become the disruptor.” To avoid “being the displaced” and become the “displacer.”
But using big data to connect with a new customer base is easier said than done. You might need to hire a Google Analytics wiz who can interpret the flood of data at your fingertips but requires an expert to interpret.
Furthermore, you’ll need to be careful that you use big data in a way that helps you attract new customers without alienating your current customer base. Learn from the mistake that Target made when it failed to balance privacy and personalization. By using big data, the company determined which customers were pregnant based on their buying patterns and then sent out coupons for pregnancy goods. This sparked an angry response from many women who regarded the coupons as a violation of their privacy.
If Ben Parker were still alive, he would know that with big data comes big responsibility.
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