Every industry is seeing innovation and disruption coming from all directions: from startups to established companies and even from companies that would not traditionally be considered a competitor. And CEOs are responding.
In fact, in a survey conducted by my firm, 72 percent of US CEOs say their organizations are disrupting their sector, rather than waiting to be disrupted. The market and investors are demanding it. Investors now routinely compare companies not only to their traditional rivals but to fast-moving startups.
This is producing a growing urgency for companies to have an innovation plan that either makes you the disruptor or positions you to benefit from the disruption. Yet 57 percent of US CEOs surveyed admit that their organization may not yet have the advance warning systems, capabilities and innovative processes to respond to rapid disruption.
At KPMG, we have been cultivating our own innovation and disruption strategy for a few years now. Work we’ve done for companies at our innovation lab has helped us determine that being a leading company today means being able to pinpoint the signals of change early and take an outside-in view of your world to have the full picture to develop the right plan for action.
Here are a few things for business leaders to consider as they ingrain innovation at their companies.
The rate of change is outpacing the ability for organizations to prepare or respond to change. Once you have been disrupted it is difficult to put together a strategy and resources to compete effectively. It’s critical for business leaders to have the pulse of change early to have the opportunity to adjust their strategy or develop a new one before it is too late.
Innovation can originate in unexpected areas well outside your industry. For example, Kleiner Perkins Caufield & Byers partner Mary Meeker, in discussing her 2017 Internet Trends report, observed that interactive gaming offers a “motherlode” of ideas for tech innovation. Meeker says gaming tools and ideas proliferate on the internet and provide the foundation for many services used today. Concepts such as live camera angles and messaging all started in video games, Meeker notes. Innovation relevant to your company can come from anywhere.
Finally, be aware of customer expectations, which can change rapidly as one industry begins to pervade another. Take the auto industry and technology. The rapid advance of technology in autos has led consumers to expect cars should be more like consumer electronics. This places pressure on automakers who traditionally have much longer innovation and product development cycles than consumer electronics companies. It’s what my colleague Gary Silberg calls “The Clockspeed Dilema”.
Companies are struggling to future-proof their business models in today’s rapidly accelerating and digitized world. The successful ones will lead their industries for years to come – or at least until the next disruptor comes along.