Working through disruption as a (traditionally) non-disruptive business

Published August 7, 2017 by Scott LoSasso

Categories: The business of marketing

I’m not a big fan of buzzwords. I consider them vague and hip for hip’s sake, an attempt to impress rather than inform. As a matter of fact, I’m this close to giving my staff the afternoon off to help gather all the “deep dives,” “value-adds,” “paradigm shifts” and “synergies” floating around the office, stuff them into a burlap sack and toss the thing into Lake Michigan.

That said, as a marketer, there’s one buzzword I can’t turn my back on. Why? Because the exponential growth of mobile devices and apps used for both business and personal activities, known as the “consumerization of IT,” has made it inescapable; after all, how we behave in our personal lives sets expectations for how we expect the business world to operate.

I speak, of course, about “disruption,” more specifically, “digital disruption.”

We’ve all heard stories about famous disrupters, how Netflix took on traditional media, Uber streamlined transportation, and Amazon transformed not only brick-and-mortar book sellers but brick-and-mortar pretty much everything. But for all the examples, certain companies working in established industries (read: predating the “consumerization of IT”) see themselves outside the fray. This is a mistake. In today’s fast-changing business world, nothing is disruption-proof. Even the tried-and-tested, can be reshaped by cutting-edge ideas.

So why do profitable, established companies drag their feet, often until it’s too late? In addition to being married to doing things in a traditional way, the simple answer is fear. They fear the unknown, they fear cannibalization or they fear the risk of swapping an established and profitable practice(s) for something newfangled and unproven.

This fear is overblown.

Take, for example, the introduction of online direct sales of a product that has always relied on traditional sales channels. In most instances, the customer already has multiple sources to buy online – one more doesn’t usually disrupt the channel unless they undercut distribution pricing. I have seen little to any downside when companies make these moves and the upside is definitive. In many cases “disruption” is simply responding to the change in customer behavior. There is no question, your customer’s behavior has changed – the question is who is there to serve them?

Look at an established industry like pizza, specifically Domino’s. Since adding digital ordering to the mix via a Web and app presence, fully one-third of the company’s sales now come from digital orders. A secondary benefit? Less phone orders means less chance of miscommunication, which cuts down on revenue and reputation lost through botched orders.

If anything, a failure to embrace ever-evolving technology and even faster-changing customer expectations leads to customer dissatisfaction. Which is why, whenever I’m asked my two cents on disruption by clients who see themselves as non-disruptive, I like to turn the tables, ask them a question. What would you do differently right now if you were a startup rather than an established company set in its ways? The answer, of course, never fails to include disruptive technology.

In a nutshell, any disruption that’s better for a customer is worth it for the company. In the words of Reed Hastings, co-founder and CEO of Netflix, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

So if you are stuck in a state of inertia, or feeling that the ship has already sailed, fear not. Another wave of rapid change is right around the corner. Automated intelligence and augmented reality will make giant strides in the next few years, and there are opportunities in every industry to innovate in ways that benefit the customer. So look for it, embrace it and start by budgeting for it because it doesn’t take new technology to reallocate budget. And in most industries, investing 5-15% of your marketing budget in innovation would probably give you an advantage over most of your competitors.

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