The rapid pace of digital disruption is creating exciting opportunities everywhere and certainly making our lives as consumers easier, but it also presents new risks and threats for established businesses. According to the International Institute for Management Development, business leaders believe that four out of ten top-ranked companies in their industries worldwide won’t survive the next five years, largely due to the accelerating change in technology.
No industry is immune to these threats. MIT’s Center for Information Systems has said that 32% of all revenues are at risk by 2020 due to digital disruption.
There are countless examples of bricks-and-mortar retailers that have crashed and burned as a result of the explosion of online retail, and now corporates live in fear of becoming the latest victim of “uberisation”. Start-ups, such as Airbnb, Nest, Netflix, Square, and of course Uber, have all used software to rethink inefficient processes and create new digital business models that revolutionise entire industries.
The answer to this threat is simple; enterprises need to behave more like start-ups! But making that happen is far from simple. While the majority of large enterprises recognise the need to be innovative, the reality of changing their culture and internal processes, carving out time for people to be innovative, and upskilling is often too challenging. Established businesses are likened to oil tankers for good reason.
No wonder these businesses are now looking outside their organisations to engage with nimble, innovative start-ups, unencumbered with the constraints of the corporate world.
Just last month, BMW Financial Services was one of the latest companies to launch its own innovation lab to help foster this innovation. The drivers for creating the lab were clear. BMW, as a pioneer in the automotive world, is: “…looking to partner with early-stage and growth companies who can shake up their operations and accelerate their innovation efforts.”
European tech accelerator, Startupbootcamp, has attracted over 100 corporates from LV= to Lloyds Bank, and even tech giants like Intel and Salesforce, to invest time and money in its range of sector-based accelerator programmes and connect with the best start-ups in their space.
But engaging in an accelerator programme should only be part of the story. Ultimately, these corporates have to transform their businesses to differentiate the products and services they deliver to customers. As consumers we’re now used to the ease and convenience of Uber and Amazon and we’re gravitating towards brands who make our busy lives easier and more enjoyable and increasingly allow us to do everything from our mobile.
For corporates this creates an urgent need to attract the best, highly sought-after digital talent to develop new business models and customer experiences. Building an employer brand that appeals to this talent is something that many businesses have simply never needed to do before. How do you communicate your corporate proposition to a distinctly non-corporate audience? What are you offering this talent? How does your business present a more compelling challenge than the most exciting start-ups or your competitors?
It’s important to remember that not only does this technology and innovation serve to improve customer services and engagement, and ultimately sales, but the City can look pretty kindly on it too. A company investing in technology and differentiating its offering has got to be a better bet for the future, right?
According to a report by Goldman Sachs, there is a strong correlation between R&D investment and sales growth: “In our view, R&D reflects the continued commitment to adapt to and stay ahead in an ever-evolving competitive landscape,” Goldman Sachs’s analysts write. “While not all R&D spend implies that the money is being well spent, i.e. it does not necessarily translate into new and innovative products or services, we do find a strong correlation with revenue growth.”
So with an increasing number of established brands looking to disrupt their own businesses and markets and gain recognition as ‘technology brands’ in their own right, why is the majority of the discussion about technology in the media still limited to technology companies? There is a huge appetite among the tech press to find out how traditional organisations are reinventing themselves in this digital age, as we saw through our work with William Hill Labs.
Quite often the challenge is that these companies are simply not used to talking about innovation and technology, or they don’t even realise they have an interesting story to tell. In the case of B2C brands with enormous consumer PR and marketing programmes running above and below the line, do they even see the benefits in promoting exactly what the brand is doing to future-proof the business and transform customer experiences? Even if they do, do they have the contacts, understanding or the time to do so?
Wildfire has experience of working closely with a cross section of brand stakeholders to craft a narrative and stories that build technology credentials across multiple channels and audiences, from consumers to employees, partners and investors. So, if you’ve got the job of establishing your company as a leader in innovation and one that aims to stay at the forefront of your industry by embracing technology, then we’d love to talk to you about how we can tell your innovation story.