It seems today’s business world has somewhat of a fascination with this ‘David and Goliath’ phenomena where small, relatively unknown challengers take on established giants of industry, and win.
Born sometimes out of opportunity, and other times out of necessity, conditions have been ideal for disruptors; low interest rates, relatively stable economies, cautious incumbents and low-cost digital tools and media channels have made competing a far easier proposition than ever before.
Adding to this is the outflow of highly skilled talent from established businesses following the 2008 Global Financial Crisis (GFC). This event may have been responsible for kick-starting resilient and motivated competition to incumbents. Out of necessity came opportunity.
Generally, disruption does not happen overnight. True disruption can take years to surface, often sight unseen until it reaches the mainstream market. Then when it hits it does so with such impact that it feels like they appeared overnight.
Disruptors are niche players. They don’t have the resources to solve every customer’s problems so they focus on a specific set of unmet needs. By narrowly targeting the gaps in the market they can attack established industries with dramatic effect.
Nowhere more than in today’s hyper-competitive business environment is strategy so important. So if you are concerned your business could be disrupted in the future what strategies could you employ to defend against an invisible and stealthy threat? Here are some tips for building resilience against disruption.
1. Be prepared
Sun Tzu, the revered 5th Century BC Chinese General is quoted as saying “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” In other words, to win you must plan meticulously, leaving nothing to chance. This is the essence of strategy. Knowing your customers, competitors, suppliers and markets better than anyone and executing a plan with precision is a key to your defensive or offensive strategy. Be honest about your strengths and weaknesses and acknowledge that of your opponents, then seek to close those gaps.
2. Strategic planning
The number of businesses without a strategic plan is astounding. According to an ASIC report, one of the key reasons for business failure is business operators get caught up in the day to day and pay little attention to long-term plans. This does not need to be an onerous task. Nor should it be a set and forget plan. Use a simple business plan on a page. Share it across your business with as many staff as possible. Use it to explore one customer at a time, identify what they want, how to get to them, identify what resources and activities you need to service them and how you can shape a sustainable business model around them.
3. Become a magnet
No business operates in a vacuum. There’s an ecosystem in which you exist. You can only control your internal circumstances and can rarely influence the external impacts so the best you can do is to be alert. Immerse yourself in your customers’ and your industries’ worlds. Participate physically and digitally in industry associations, community groups, events, webinars, discussions; anything to keep you aware of the emerging threats and opportunities to avoid surprises. Invite in new collaborations and partnerships to test existing models and explore new possibilities. Objective feedback is priceless.
4. Customer centricity
Build a culture of customer centricity. Understand intimately who they are and what they need to solve their pains. Use tools like personas and journey maps to humanise their experience. Know how, when and why they communicate so you can shape their journey to engage and enhance the experience with your brand. These are important artefacts to build empathy and understanding in your organisation so they are motivated to find value-creating customer solutions. If you keep the customer happy they will come back. It’s a simple equation.
5. Test, test and test again
All strategy will decay over time, no matter how effective it may have been. In today’s high paced, hyper-connected world anything and everything will change without notice. You are just expected to know what’s going on to remain competitive. Stay close to the market, listen, learn and respond. Don’t make assumptions based on what worked yesterday. Keep your customers close to you. They are your best form of feedback. This will only happen if you earn their trust, then they will tell you everything you need to know.
Every business today is at risk of disruption. Capitalising on this and finding the opportunity is what long-term planning is all about. Having the right strategy in place is the crucial element many businesses overlook. Make sure your business is not one of them.
Read the full Spring edition of Contact Magazine here