What will drive priorities for leaders and organisations in 2019

Organisations in every industry are at risk of huge disruption, with procedural work being replaced by AI

BY Contributor 18 Jan 2019

By Anthony Mitchell, co-founder and chief potential officer, Bendelta.

Organisations in every industry are at risk of huge disruption, with procedural work being replaced by AI, robots or innovative business models. What does this mean for leaders in 2019? Will it be essential to prepare your organisation for digital disruption or are some industries immune?

The answer to the final question is a resounding no. Just a decade ago, two sectors which regarded themselves as being free from disruption were universities and law firms. Today, both of these fields have been massively disrupted and would now struggle to remember the time when they thought things would be otherwise. And while telecommunications, software and publishing have already experienced major disruption, the fields of insurance, energy and healthcare are primed for massive shake-ups.

The least prone industries tend to have three key characteristics shared by the dominant incumbent players: their lighthouse brands are well-established, they have key proprietary technology, and they have tight control of distribution channels.

The last point is especially important. Where we have seen major disruption is where a new player (think Uber, AirBnB, Netflix, etc) has been able to get closer to the customer and find a way to effectively ‘own the demand’ in the system (where the incumbents had previously won by owning the supply). ‘Owning demand’ is now the number one priority for winning in any sector.

What does this mean for your organisation?

Brand:

While some organisations have strong brands that make them top choices for nuclear event work, very few of these come anywhere near the strength of the most powerful consumer brands. Moreover, nuclear event work is usually less than 10% of the total market in any field, so it is not enough to sustain many players.

Taking just one field, that of employee surveys, where established global players have lost some of Australia’s largest corporate accounts – either to new, nimble digital start-ups (such as CultureAmp) or because of the clients moving to democratising technologies (e.g. Qualtrics) to do it all internally. What seemed like powerhouse brands (offering massive global benchmark databases) have not been resistant to competitive threats, which (along with pricing power) is the real indicator of brand power.

Proprietary technologies:

This is another weak area for many businesses. While plenty of firms have their own methodologies, frameworks and even trademarks, it’s very hard to think of many large players which have a proprietary technology which clients would be reluctant to move away from. Where such assets have existed in the past (e.g. job evaluation systems, psychometric tools, business management software), one of two things have tended to happen:

The asset is increasingly seen as ‘old world’ and irrelevant to operating in the cyberphysical world; or
The asset has effectively become nonproprietary and almost every consultancy in the sector offers it in some adapted form

Tight control of distribution channels:

Strike three. Many organisations, regardless of industry, have little control of distribution channels. While some have the advantage of being very close to the customer (and there is no doubt that this is a real asset), it’s hard to argue that they ‘own demand’ in the way that, say, an Uber or AirBnB does. Quite simply, it’s hard to think of many organisations which are effectively platform players, that is, providing the place where a wide cross-section of customers come to identify and engage supply options.

So, what does this mean leaders should do in 2019?

Do some thinking and make some choices

Who are you going to be? Some choices include:

Transform your organisation into a nuclear event player (for the 10% of work that should be least disrupted). This can work for either large or small players, but it requires absolute rocket science positioning and capability (and a lack of other players who are likely to be better at it).
Develop or buy proprietary technologies that are meaningful to your business in the cyberphysical age.
Become a platform player or, in some other way, start to own demand (not supply).

Act determinatively on the above

None of the above options succeeds through marginal investments of money, resources or attention. Each of them requires your whole-hearted focus and full commitment. You may be able to dip your toe in the water through experiments and pilots for a while (and that’s probably a good idea) but being ‘half pregnant’ is not an option.

Take some ‘no regrets’ steps

No matter what path you go down, there are some actions that are sensible for almost any leader in 2019 and are unlikely to do you any harm. Three items at the top of this list include:

Get closer to your customers. Be honest with yourself about your organisation’s partnerships and make changes so that they become truly synergistic.
Get on top of your organisation’s digital service delivery and digital enterprise architecture. Ask yourself: if a startup looked at what we do and decided to make it all as digitised as possible, what would they target and how might they do so? Then become that start-up and do it to yourself.
Create an incredibly attractive place to work. Talent will be the best asset for the kind of transformation you may need to make. Without some smart, motivated people collaborating around your evolution or revolution, you’re pretty much out of the race before you start.