When I arrived here in Bali so many years ago, there were no smart phones. Social media sites like Facebook, Twitter, LinkedIn and Trip Adviser were also unheard of back then. In fact, the internet was hardly on the minds of anyone because it was still so under-developed.
But today, new tools and apps have people making and reading comments on your business instantly. With Trip Adviser linked to Facebook on my phone, I have often seen my friends’ reviews from all over the world. Who would have thought that I could be here in Bali reading about a friend‘s impressions of a restaurant in Malta?
Digital disruption is happening now and will only become more intense. Normal businesses like yours and mine are going to be affected in major ways; it’s only question of WHEN.
A recent Deloitte study identified that one third of businesses in Australia would be subjected to a ‘big bang’ disruption with a short fuse. Is your business is in media, retail, communications, finance, real estate, professional services, or arts and recreation? If it is, Deloitte predicts that you will soon face an immediate 35% change in key metrics; such as revenue or cost structures. If your business is in education, health and transport, then you have no more than five years to adjust.
So how should you respond to this? If retirement is an option then you can avoid the disruption that such a massive change will bring. But for the rest of us, it’s perhaps better to be proactive than reactive.
We need to look at this differently. Instead of thinking of these changes as disruptions, let’s look at them as opportunities!
First, a strategy must be put together.
Here’s an idea of how such a strategy would look.
● Focus on your core business. Stick to your knitting. Non-core business efforts add risk because they don’t highlight or grow your hard-won competitive capabilities. All they do is over-utilize scarce resources. Best performing companies are not only focused, but continue to invest in their core services—regardless of the business cycle. It’s a much better strategy to clean out any non-core efforts and sell them in the good times with an added premium. (Think of it as eBay on steroids. Your trash is someone else’s treasure)
● Review your business model. This is how you create value based on probable changes in your industry.
● Review your strategy for growth. Where are you most at risk? Check to see how relevant your current strategy is. What are some of the new opportunities digital disruption can offer your business? What different mix of capital do you need? Always develop your strategy to adapt with your external environment. Don’t leave it stagnant.
● Review your fixed assets. Are they still suitable for where you want to go? Will they help you to meet your company goals?
Next time I want to look at this subject from a financial point of view. Two more important elements must be considered in terms of this digital revolution we are seeing. These two elements are revenue streams, and business costs.
CEO and Co-Founder
neXtep Business Builder Community Pte Ltd
Singapore ACRA Business Registration Number: 201424522Z
80 Kitchener Road #09-09/10 Singapore 208539