What would your firm look like if set up today
For years, people were more likely to get divorced than change bank account, but now apps like Monzo, Starling or N26 allow for a new account to be opened in less than 15 minutes and a few clicks.
For decades, going to the local mall was a rite of passage for kids and department stores were the way to experience an array of products you could not buy elsewhere. For most of our lives, restaurants were chosen based on proximity, yet now the Burger King and McDonald’s apps may be less than one inch away from each other on our phones. Things have changed.
The world of search means we can compare prices from seemingly all retailers in seconds. Companies with skeletal staff can construct digital storefronts that look as impressive as real-world stores with thousands of outlets. Loyalty, often based on proximity or the routines of life, now comes down to familiarity or risk aversion or simply the act of letting us buy with one click and not having to get up to find our purse or wallet.
We are now used to companies over-serving us at their cost. Each day, Amazon delivers vast boxes of low-margin goods next day for free – our expectations have changed. When we can see the Uber or Lyft driver’s name, real-time location and contact them directly, we are stunned when we get a delivery slot of five hours in the afternoon and no means to talk. We now find the idea of anything ordered arriving days later inept, rather than the reality of a complex global logistics system held hostage by grounded ships in the Suez or global component shortages.
When Netflix offers us some of the best TV ever made for less than a movie ticket, or ClassPass offers us access to millions of gyms for less than our local gym, we start to assume we’re being taken for a ride, not that venture capital firms are subsidizing our extravagant demands. Free has become normal for countless brilliant websites featuring content that takes expertise, craft and a fortune to create.
We now expect websites from every company to be beautiful, fast and thoughtful; why can’t I pay my rent with a credit card with one touch? Why can’t I buy access to my local swimming pool online? Why is there not a map of all electric car charging stations showing empty spaces, and why are there coin-operated parking meters here? We have to accept that loss-making start-ups and vast tech giants have changed how we see every business and interaction we experience.
While the world has been changing more rapidly than we have been comfortable with, while new technology has made things possible, while consumers have slowly become used to and then expect the best-in-class experience provided by companies built for the modern age with new technology at the core, large companies have generally changed little.
We live in a moment in time where companies are told to disrupt or die, to be a startup or be left behind; we are told the pace of change is faster than ever, and we live in unprecedented and unpredictable times. And I’m just not sure this is the case.
Perhaps what’s really happened is that during decades of a relatively benign global environment with extremely low interest rates, low unemployment, growing economic prosperity, and with quite honestly remarkably few cases of dramatic failure like Kodak, Nokia or Blockbuster, most companies felt little need to really change. We think we live in the golden age of innovation, but really we live in the age of consolidation, share buybacks and high dividends for shareholders. We live with companies doing the least they have to do in order to not fall foul of the financial markets. Realistically, this approach makes sense. The reality is that profound change is hard, requires buy-in across departments, and the business case for change is rarely clear. I’m aware that many senior leaders reading this will be frustrated at what appears to be criticism of inaction, when in fact I merely want to present a clear picture of where we are. Business leaders do an amazing job these days of navigating the stormy and cloudy waters of the modern business world.
Yet each day technology makes new things possible. Each passing week creates a larger delta between the wonder of what is possible and the reality of a company changing slowly or not at all. What we feel isn’t so much the chaos of a faster-changing world, but increasing tension, a blockage that’s piling up. We see older banking systems become even more outdated, venture capitalists feeling ever more reluctant to look under the hood; we see companies hoping to survive rather than put the effort into opening the can of worms that is the crumbling foundations on which they were constructed.
It’s these three changes – rapid global change, the changing physics of business, and the rise of insurgent companies – above all else that now make life different. They mean that companies have to think hard, be bold, be imaginative, audacious and challenge themselves.
To move forward successfully we must understand the context and reason for change, and start asking hard, existential questions about our businesses. The most profound questions; the very best ones, which we hardly ever dare to ask are: What would your business look like if it was created today? What would it do? How would it do it? How would it make money? What would you still have done and what would you never have created?
Tom Goodwin is a top voice in marketing and a respected industry commentator on the future of business. The second edition of Digital Darwinism: Survival of the Fittest in the Age of Business Disruption (Kogan Page Inspire) offers leaders invaluable practical insights into digital transformation models, and defines key strategies for their businesses to evolve and adapt successfully, in an age of fast- paced change and uncertainty.