Not so long ago the senior executives would routinely question whether digital disruption was relevant to their businesses. The stock opinion was that this was something for other people to worry about. The new generation of start-ups – the emerging technology-based, customer-obsessed companies – weren’t viewed as a real threat to the main businesses of the established corporate giants. They didn’t have the scale and reach to compete. This was a bubble.
They were in denial.
It’s very different now. The C Suite rank the threat of disruption by new entrants at the top of their list of concerns keeping them awake at night. Whether it’s in banking, insurance, energy, telecoms, retail or any other industry, the threat is the same. The public sector has also woken up. The speed and agility of emerging challengers, their ability to redefine the bases of competition, and their confidence to do so using radical new business models, is wiping out many established 20th century businesses. The average lifespan of a S&P 500 company has nose-dived from over 60 years to 18 years and falling.
In an environment where the expectations of customers (whether B2C or B2B) are increasing at an alarming rate and new consumer technologies are adopted faster than ever, many incumbent legacy businesses are struggling to find the capacity and capability within their organisations to keep up. The gap between expectations and reality is growing wider over time.
The new normal is one where the economics of business have fundamentally changed – previous barriers to entry such as scale, proprietary technology and brand heritage are no longer the huge advantages they once were. In fact, in some cases they are the very things that trap incumbents, reducing their ability to make the decisions needed to survive and inhibiting action from leaders frozen in the headlights.
Incumbent businesses need to respond by changing the way they think and operate. Traditional methods are not going to close the gap. Most executives now get the need to innovate at the front end of their businesses – improving customer experience, designing better user interfaces, developing prototypes. In many ways these have become hygiene factors, helping big businesses to maintain parity with the challengers. However, they are less fluent when it comes to thinking about truly disruptive innovation, preferring the safety of incrementalism.
So if we are clear that the challenges aren’t the same, It means we need different solutions and we won’t get those by asking the same people the same questions. In the next few weeks you’ll hopefully be hearing more and more about Capita’s new consulting business. Our clients across sectors already trust us to deliver – 35 million people every day are touched by the services we provide. But we recognise that our clients need something more. Capita is building a consulting business that will do just this; ask better and different questions and get different and better answers We won’t be advisory consultants – we will be builders, implementers and operators of real and effective digital solutions.
I really believe that we have an unprecedented opportunity to offer something truly different to the market and deliver large scale, effective, responsible change. Our model will go from small consulting teams able to produce effective digital strategies, to accelerator teams which will rapidly demonstrate how business solutions can be accelerated and introduced into the business. Our digital factory will scale these into ongoing customer relationships, with reliable and measurable delivery capabilities. And finally we will run business and technology platforms that can be “white labelled” and offered to multiple clients.
We want to be at the heart of reimagining exactly what consulting means and what it can do.
It’s not business as usual – so it shouldn’t be consulting as usual either.
Author: Patrick Gormley, Head of Consulting, Capita.