We’ve moved away from a world of certainties where you kept an eye on three or four main competitors in your industry niche, and maybe cast an occasional derisive glance at a newcomer or two.
In the age of digital disruption, the cosy confines of your niche mean nothing to the disrupters looking to steal not just your slice of the pie, but the pie itself.
Consider these well-publicised examples of industries that have been turned upside down by an outsider coming in and shaking down the status quo:
- Television networks have more to worry about now than each other’s programming — it’s called Netflix;
- Yellow cab, black cab? The old turf battles of the taxi industry have become irrelevant in the face of Uber’s decimation of it; and
- In the space of less than a decade, Airbnb has become a major challenger to the likes of the Hilton and Marriott hotel chains, even though it owns no hotels.
These are but a few examples, covering the areas of how we get our entertainment, how we commute around cities, and where we stay when we travel. But this is only the beginning.
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The common factor with these examples is that all the disrupters have used technology to essentially do the same jobs but in more efficient and customer-focused ways than the industry incumbents.
Technology is not about to stop happening. As I asked last week: how fast is fast when it comes to technology and behaviour? Fast enough for you to start seriously thinking about how disrupters will use technology—in the form of virtual reality, 3D printing, the Internet of Things, as well as big data, nanotechnology and robotics—to drastically transform what your industry looks like.
If you’re an incumbent in an industry, you have legacy and turf to defend. This has its advantages and disadvantages.
Among the advantages is the relationship you have developed with your customers and the brand integrity you have hopefully developed along with that. You also have deep knowledge about your industry and, hopefully, about what your customers really want.
The danger here, of course, is within this status quo your company may start to treat customers with, if not contempt, then maybe complacency: “This is how we’ve always done it, our customers seem happy enough, why change a good thing?”
The flip side to this is that when things are comfortable, profits are rolling in, and people are relatively happy, companies tend to want to preserve the status quo.
There may be tinkering at the edges—new processes, some new technology introduced—but nothing too radical.
And this is the great dilemma for industries facing major upheaval: protect the turf you already have (think about newspapers and their tortured shift to online), or possibly shift resources to such an extent that you have to rethink all of what you do and come up with a completely different business model?
Your traditional industry competitors are in the same boat as you, pinching ever-shrinking market share from each other as your whole industry morphs into something else entirely new.
Incumbency is most definitely not a synonym for irrelevancy. However, you do need to think beyond the parameters of your industry. You do need to keep an eye on advances in technologies that could laterally affect your industry. And you do need to stay attuned to what your customers want and how you can better deliver it to them.
By doing so, you’ll not only be ready to face the challenge of the disrupters, you’ll also be on a footing to be the disrupter.
Fi Bendall is chief executive of The Bendalls Group, a business that leads STRATEGY : ADVOCACY : MOBILE delivering the business acumen to drive effective positive results in a disruptive economy for the C-suite. Fi has recently won a Westpac/AFR 2015 100 Women of Influence award.