Three Ways Companies Can Succeed In “The Age Of Disruption”

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Uber. Airbnb. Etsy. Innovations with new business models and new technologies — or companies that exploit old technologies in new ways — are emerging on an almost daily basis.

And the most disruptive enterprises don’t gradually displace the incumbents. They reshape entire industries, swiftly obliterating whatever stands in their way.

So how are C-suite executives tackling the threat of competition from companies with very different business models? Or threats from companies in adjacent sectors moving into their businesses?

Leading innovators and high-performing organizations see advances in areas such as cognitive computing and cognitive systems, which can sense and learn, as the key to dealing with disruptive events. These same businesses are also more likely to be entering new markets themselves.

A new IBM Institute for Business Value study, “Redefining Boundaries: The Global C-suite Study,” is based on findings from more than 5,000 C-suite leaders across 21 industries in more than 70 countries. The study explores what these leaders think the future holds, how they’re identifying new trends and how they’re positioning their organizations to prosper in the “age of disruption.”

Three key initiatives emerged from the study findings. They are:

1) Beware of New Intruders: The biggest risk to businesses used to be a new rival with a better or cheaper offering, making it relatively simple for a business to alter its strategies.

Today the competition is often invisible until it’s too late. Entrenched players are being threatened by new entrants with completely different business models, as well as smaller, more agile players unencumbered by legacy ways of doing business. Two-thirds, or 67 percent, of the C-suite executives saw industry convergence as a major factor over the next few years.

Seventy-two percent of our respondents said technology is the biggest factor affecting their businesses.

2) Don’t Just Ask for Customer Feedback, Use It: Many of the C-suite executives interviewed freely admitted that they find it hard to see what’s coming next. Yet, when it comes to identifying and exploring new trends and technologies, only half of respondents are using customer feedback.

Most C-suite executives anticipate changing the way their organizations engage with customers. Sixty-six percent of the respondents expect to focus on customers as individuals — up 22 percent from a similar study in 2013. Eighty-one percent plan to drive more digital interaction, a 19 percent increase from two years ago.

The most forward-looking C-suite executives place more weight on cognitive computing, advanced manufacturing technologies and new energy sources and solutions. They’re also willing to invest in emerging technologies that have higher entry costs, but can lead to higher pay-offs.

3) The Role and Risks of Technology: Most C-suite executives said cloud computing, mobile solutions and the Internet of Things (IoT) are the technologies most likely to revolutionize their businesses.

They say cognitive technologies provide a bridge to new levels of personalization with consumers and greater insight from exploding volumes of data.

A number of executives also cited the benefits of cognitive computing in generating new discoveries, and making better, more informed decisions within the context of individual customers. Cognitive computing enables businesses to analyze customer data, create predictive models and track the changing needs of customers.

Our study also found that the leading innovators among C-suite executives are 25 percent more likely to both change their revenue model and reassess target customer types and segments than other respondents who prefer to use resources that already exist in their organizations.

No technology can predict the future. But by using predictive and cognitive analytics to scrutinize the real-time data that a business receives from the marketplace and its partners, business leaders can now forecast the future with a greater level of confidence.
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To learn more about the new era of computing, visit ibm.com/outthink