Disrupt or Perish
Industry needs to wake up to
disruption before it is too late, warned experts at the ET Global Business
Summit early this week
If the wisdom of chief
executives and thought leaders at the ET Global Business Summit can be
distilled into one line, it would be: the world perhaps faces the most radi cal
restructuring of global economy and businesses since the Industrial Revolution,
and companies will have to reorient or even disrupt themselves to survive. The
tsunami of technology-driven and innovation-led dis ruption is changing the
pecking order in multiple indus tries as businesses confront unsettling levels
of turbu lence and volatility.
Experts at the Yes Bank and
The Economic Times Glob al Business Summit believe this trend holds true for
India too. In fact, the belief is that India is well placed to deal with the
big D. “The three D's of disruption -demograph ics, deregulation and
digitisation -are perfectly aligned in India, which is thereby poised for an
entrepreneurial leap. The country is at the tipping point of disruption, which
needs to be explained to Indians as being a positive force,“ said Rana Kapoor,
CEO, Yes Bank.
The New Plan
To combat the forces of
disruption, companies need to proactively embrace internet-based technologies.
New players, changing demographics and consumer behaviour, and introduction of
new services and applications will require companies to migrate to
internet-powered business models. “Internet plus action plan is a new form of
economic plan where internet is integrated with traditional industries
encouraging to the spirit of excellence in these industries and driving
economic growth. This elevates internet to become the most important engine of
growth for any growing economy,“ said Lei Jun, founder of Xiaomi, who disrupted
the smartphone market by providing world-class products at affordable prices.
Increasingly, online
challengers like Uber and AirBnb are changing the rules of the game. So how do
incumbents save their business models from being disrupted? Experts say
incumbents get locked into a business model, and don't change fast enough.
“Incumbents have a choice: they adapt or they disappear. That's been true in
capitalistic economies. When you are a strong established incumbent, you don't
look one or two steps ahead but five or ten steps ahead to foresee what
disruptions can come in your way. The clock speed challenges traditional models
of innovation. Your organisation needs to navigate through that-to be Fujifilm
and not Kodak. The difference is that five steps used to be a step every year;
now five steps may mean a step every month,“ said Rich Lesser, Global CEO, BCG.
Management guru Tom Peters
put it very succinctly: “Only self-destruction will pave the way for
re-invention in this era of uncertainty.“ Companies like Deloitte, a global
leader in professional services, are getting ready to face disruption. “Our
business itself is prone to disruption. It's a big data business, so can we
have better data analytics and better insights, and we have invested a lot in
that. Have we done enough? Hope so. Will we have to do more? Certainly. The
other trend is general automation and analytics around other parts of our
business. There's hardly any practice that is not being affected or disrupted
in some way. The pace of business change is the greatest that I can remember.
We are investing big in all our service lines to prepare the firm for the next
leap,“ said David Cruickshank, chairman, Deloitte.
Disruptors are now taking
futuristic technologies mass.Take Hyperloop Transportation Technologies (HTT),
a futuristic technology company that's propagating a revolutionary new way of
transport. “India has a great opportunity to leapfrog to better modes of
transportation. India should not invest in bullet trains, but invest in the
future.The Hyperloop could cover the distance between Mumbai and Pune in less
than 40 minutes,“ said HTT cofounder Bibop G Gresta.
Since India is witnessing
the first signs of disruption in many industries, successful global disruptors
like Vice Media and Hyperloop are keen to set up base. “I believe we are at the
beginning of a digital revolution in India. You have the confluence of 4G, OTT
apps and the price war happening. For us, it's great because everyone is more
concerned about the platform while we are more about what's in the pipe
-content.“ said Shane Smith, CEO, Vice Media.
The march of disruptors
raises its own set of challenges that often tests regulations. The Indian
e-commerce players are upping the ante on the issue of level playing field,
while global players say their India operations are local in every sense. “We
have the opportunity to build great internet companies from India, but we need
to create a fair playing field. If we are able to create that level playing
field, Indian companies will have significant advantages,“ said Sachin Bansal,
executive chairman of Flipkart. But Amazon India head Amit Agarwal was quick to
counter that argument. “I just want to reiterate that Amazon is a company
incorporated in India, domiciled here. It follows all mandated laws, such as
two-factor authentication, and pays service tax as well,“ he said.
It's clear now that the
digital age which started a decade back will dramatically alter and accelerate
the change process for businesses, so the message is clear: disrupt or be
disrupted.
ETM2APR17
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