Consumers Drive Digital Transformation

Digital technologies dominate strategic innovation discussions, as consumers gravitate toward online and mobile platforms for more of their brand interactions. As customer behaviours change, brands must re-evaluate their approach to marketing and engagement to remain in line with evolving expectations. To keep up, brands must establish programs that support both the digital and human sides of the customer relationship and accept that brand marketing has evolved into co-creation of the brand in interaction with consumers and other external stakeholders. Customers can switch overnight if they want, but companies need to change the course of a bigger ship, which is harder.

The challenge is to follow up on this speed. Facebook is a great example. When Facebook IPO’d, the feedback was negative because Facebook hardly made any money in the mobile world. That was 2012. In 2014, most of Facebook’s revenue came from the mobile world. They changed the ship at high speed and because of that, they are extremely successful. Customers disrupt because legacy companies are slower than individuals to adapts to the fast-changing evolvement of technology.

Author’s creation inspired by Scott Brinker’s interpretation of Martec’s Law. This model states that adaptation curve of individuels to changes in technology exeeds legacy companies ability to integrate new technology in their products, services and business models. This leaves room for new-comers entering the market with solutions based on new technology.

Another reason is the collaborative movement. A lot of these new popular companies are all active in the collaborative sphere, where customers are helping other customers. Everyone is aware of the well-known examples like Uber, but the truth is that we have thousands of those companies around in many sectors. The collaborative and sharing economy gives a more personal side to the business.

This makes it more human. In this digital world, the human part of the business is increasing in value. The old economic law of scarcity pops up: If something becomes scarce, it increases in value. Well, the human part of the business is becoming scarce. That is one of the reasons why the collaborative economy has so many fans. That is why consumers are disrupting normal market movement.

Who is Actually Driving Digital Disruption?

The emergence of new technology is often cited as what drives the disruption of an industry or business. But as mentioned before that is not true in most cases. The former Harvard Professor and best-selling author Thales Teixeira argues that successful disruptors are faster to spot and serve emerging customer needs than larger competitors. Many established companies lament the disruption they are facing at the hand of technologically savvy start-ups. But Teixeira argues that these newcomers simply spotted and served an emerging customer need faster, taking market share from established companies that did not see them coming. As stated by the former CEO of GE, Jack Welch:

“When the rate of change outside an organization exceeds the rate of change inside the organization, the end is near.”

You will find more information on this topic in my new book:

"Mastering Digital Transformation - The agile approach to change and successful digitalization in uncertain times."