As I see it, the difference between being a digital disruptor rather than disruptee boils down to acting on a principle that fits in one tweet with letters to spare:
They’ll like smartphone apps better
“They” are the people with whom you do business: customers, partners, or employees. My claim is that however you’ve been interacting with them in the past—whether that’s marketing and selling to them, equipping them to do their job, or collaborating with them to deliver products or services—odds are that they would prefer a great smartphone (or tablet) and app-centric experience to the old way.
My journey toward this conclusion started not that long ago. I would suggest to executives who were skeptical that mobile payments would ever take off that they take a close look at Starbucks. And sure enough, while most companies remained on the sidelines, Starbucks built its smartphone app into a platform for seven million transactions a week.
More recently, I’ve suggested to those skeptical about consumers embracing the Internet of Things (IoT) that they should not to be distracted by conceptual problems like universal interoperability or the future of privacy, but rather to focus on delightful experiences they might be able to bring to market now.
And sure enough, we’re seeing a steady stream of ways some companies are building their brand, business, or both by blending digital and physical. Lego Fusion Town Master turns your bricks into interactive bits. L’Oreal’s My UV Patch will give you information about your UV exposure. The Syfy Channel’s Syfy Sync app will drive your Philips Hue light bulbs to react to what’s happening on the screen for an increasing number of shows, including the first season of The Expanse. (Full disclosure: I have Philips Hue light bulbs, I think The Expanse is great, and I can’t wait to get my hands on a Lego Fusion set and a My UV Patch.)
Insight from two smart people and data that can be boiled down to one slide helped me square such a simple truth with the fact that big incumbents in industries such as retail, hospitality, and banking nonetheless continue to be shaken, rattled, and rolled by disruption.
About a year or so ago, a seasoned veteran of the Silicon Valley venture capital scene shared some insight into how investors picked “targets” susceptible to digital disruption by a digital start-up: “we look for industries with weak mobile flanks.”
Annually, my employer, Apigee, conducts a survey of digital’s impact on work, life, and commerce among U.S. smartphone owners. With the data we had in hand at the time, this criterion made perfect sense to me. Now, with another Digital Impact Survey under our belt, I’ve taken it to heart as a principle for laser-guided pinpoint-accuracy target selection: people love smartphones and apps.
According to the survey, in 2015, favorability toward apps and smartphones among adult smartphone owners reached 92 percent and 97 percent, respectively. Among Millennials, this rises to 98 percent and a unanimous 100 percent. Majorities report that their devices have changed how they shop, manage their health, bank, and relax at home. And if your business involves people’s homes, health, finances, services like medicine or law, or shopping, majorities believe that greater ability to use apps would make these scenarios better.
But this raises a question: the data on enthusiasm for smartphones and apps is plain as day, and it’s practically impossible to have missed the fact that Uber—the poster child for “attacking an industry with weak mobile flanks”—has risen to a valuation greater than that of Ford or GM in just a few years,so how is it that every big company hasn’t devoted gone “all in” on creating an awesome smartphone app experience?
The processes and culture of most large companies formed in the pre-digital environment where technology-driven disruption couldn’t happen with the pace and scope now possible thanks to mobile and cloud. So the only way to avoid being shaken up by outside forces is to “shake things up” proactively—not always an easy thing to do in large enterprises.
Jenny Banner, a CEO in her own right and board member in a sector that’s ground zero for digital disruption—banking—explained these real-world dynamics at MIT’s CIO Symposium.
She describes what it’s like to be on the board of a big bank these days: “[T]oday it feels like a tech board. And it feels like one that is under siege by a thousand piranhas chipping away at various business lines and profit centers.”
On a concrete note, she continued: “Our 19 year old … asked if she had a bank account. She had her phone in her hand and she said ‘I know I have this app, but do I have a bank account?’”
Her advice on what CIOs need to do about it? "Don't come in with 1,000 pages of PowerPoint decks and heatmaps. Come into the boardroom, put your fist down, and say, 'There's a war on; there's a completely different game that's in town, and it's not coming from those names you have listed as your peer group'.”
To be sure, there are CIOs in large enterprises in the pole position leading digital transformation. But say these phrases in the same breath: “Global 2000 CIO” and “rabble rouser.” Traditionally those are not two things that go together.
So the secret is simple: “They’ll like smartphone apps better.” The evidence for it is clear. But the response that leaders in large enterprises must take to head off disruption—or become disruptors themselves—is likely to be break old rules and norms, and take business and technology leaders out of their comfort zones in the process.
Until that happens, that’s the open door for disruptors—and an opportunity for Global 2000 CIOs to seize. Need some inspiration? You don’t have to look any farther than one tweet showing how a fifty-plus year old company is building using smartphone apps to build its brand and business with every bit the aplomb of a digital native.
So “just do it.” You don’t need 1,000 pages of PowerPoint decks: you only need two tweets.
(Disclosure: Philips and Lego are customers of my employer, Apigee.)
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