Many business leaders are at a loss. When do you disrupt your business? I stand and submit that a digital business is truly a people-driven business. In the age of digital disruption, businesses need to reinvent themselves and re-focus on their raison raison d’etre: the customers.
Without customers, there is no business. Businesses cannot exist solely on the strength of their brand, their shiny and new technologies or their optimal business processes. These are the means to the ultimate end: to consistently add value and shape the customer experience.
It’s one thing to recognize that a reinvention needs to happen and another to actually start and complete it. According to a Harvard Business Review article, 80% of executives in large businesses recognize the need for transformation. Yet only one out of three have the confidence to pull it off. As I have written in a CXO Weekly article, strategic transformation is tougher especially when the company is doing well, at least by Wall Street standards. As we Americans say: “if it ain’t broke, don’t fix it?” This proves again and again Clay Christensen’s key message in “The Innovator’s Dilemma.”
Mark Bertollini, CEO of Aetna (and HBR contributor) had a big challenge: he had to convince the Board of Directors that the company had to engage in a strategic transformation in spite of the fact that the conservative health insurance giant is performing well year over year. In the same HBR article (“When to Reinvent”), Mark offered the concept of “fault lines” – basically identifying gaps between a company’s current state and future state.
The timing to disrupt your business is simple: go back to your customers.
In the days of yore, we’d like to think that there are two type of companies: businesses that serve other businesses (B2B) and businesses that serve consumers directly (B2C). Now, this might be a naive claim on my part but I strongly believe that a digital business is a consumer-driven business. Digital has radically changed everything. Think about this: if you’re an ERP strategy consulting company, you might think that you’re targeting another business (a manufacturing company) to offer services. However, the market landscape has vastly changed: digital has given forth to social media and enabled the Voice of the Customer (VoC). At the end of the day, it is still people that needs to be engaged even in B2B companies. People are still responsible for making procurement decisions and strategic content must be designed appropriately, matching the customer buying journey.
Aetna used to think that its buyers were large corporations. They thought that the business value was to ensure that the network of doctors and health providers were expansive enough for its clients’ employees. However, between two market forces (e.g. Affordable Care Act and the 2009 Economic Crisis), there was a new market opportunity to offer health care services directly to consumers. Aetna quickly realized that its current state of enterprise service offerings is pricey, convoluted and confusing to consumers. In order to be relevant in the future, the company was convinced to reinvent itself in order to engage a new set of stakeholders.
Here’s something to think about:
- Is your company still targeting the same customers or do you have new ones you may not be aware of?
- Are you still providing value to your existing customers?
- What makes them loyal to your brand?
- What are new trends in your industry with regard to customer behavior?
So, when is it time to disrupt your company? The time is when you have ceased to be relevant to your customers.
Written by Ken Polotan