How can Companies quickly adapt Strategy Execution to Market Disruptions?
This is a question that some companies are already struggling with.
Changes in market dynamics, such as alterations to customer needs, can have a significant impact on the way businesses operate.
In these situations, companies need to rethink and modify their strategy execution approaches in order to best respond.
The rise of digital and mobile is disrupting industries and customer expectations. As a result, companies are challenged to create new delivery models that meet their customers’ needs.
For example, through digital solutions, companies can create an online presence for customers to order food or other goods in advance, thus cutting down on wait times in-store and increasing stock turnover.
However, traditional approaches to strategy execution may not be sufficient; companies must shift their approaches in order to become more agile, effective and competitive.
“Digital” is changing customer behavior and creating new competitors:
The digital revolution has given consumers more options and control over their experiences. Customers can now reach out to brands directly through social media, blogs and other online resources, thus making it easier for them to voice their concerns to companies and create negative brand sentiment.
It is crucial that companies react accordingly by providing the highest quality of customer service possible in order to retain brand loyalty.
At the same time, there are more players in markets and industry landscapes are becoming more dynamic.
For example, companies must be on-boarded to the changes occurring in the customer landscape. An effective strategy execution approach must ensure that these changes are considered and implemented in order to seize opportunities and avoid falling behind.
In parallel, digital disruptions have triggered structural changes which necessitate different approaches to strategy execution and market responsiveness.
The technology revolution has increased customer access to information and decentralized markets, leading to more dynamic marketplace dynamics and high-velocity player interactions.
Now, companies need to not only create strategies for seizing market opportunities, but also for adapting and responding to fast-changing developments.
Traditional approaches to strategy execution are unsustainable in this new environment; they are too slow and costly to keep pace with digital disruptions.
To succeed in this environment, businesses must be able to rapidly adapt and respond to changes in customer needs.
Strategy-focused organizations that can act quickly and nimbly will have the best chance of defeating their competitors.
In response to changes in market dynamics, companies need to shift their approach to strategy execution.
The speed and fragmentation of the digital economy require a new approach to strategy execution that is quicker, more agile, and more focused on customer experience.
One approach is focused around collecting and analyzing real-time data in order to provide rapid insights into consumer needs and market developments. This approach is termed digital transformation or digital disruption.
The digital transformation approach offers companies a unique opportunity to become agile and responsive to changing market dynamics.
It enables companies to quickly develop new delivery models that meet customer needs. In contrast, traditional approaches can be costly, slow and cumbersome.
This approach requires companies to embrace the idea of being “disruptive” within their own systems by breaking down silos between internal functions in order for them to function more effectively as a system.
This can be achieved by integrating technology and data into every aspect of the business in order to help collect, analyze, and act upon information faster.
In this environment, companies must shift from a traditional vertical structure to a more horizontal one. The structure should be organized around market offerings rather than functions or other factors.
For example, companies should not be organized by product vertical or geographic region; they should instead organize their people based on the offerings that they serve in order to create functional solutions for customers’ needs.
The result is a horizontal organization that facilitates iterative development and collaboration.
A digital transformation approach to strategy execution necessitates an investment in technology and talent, as well as significant changes in leadership and culture.
For example, leaders must shift from a traditional command-and-control style of leadership to one which focuses on creating a culture of continuous innovation.
This approach also requires new skill-sets for different functions within the business environment; project management must be augmented with design thinking processes and data science skills for analysis.
Digital transformation inherently relies on the co-existence of traditional and digital systems, and therefore companies must ensure that their organizational structure will support this approach.
In this environment, companies can use new technology and approaches to strategy execution to better understand their customers’ needs.
Personalization is a critical component of digital transformation.
Our behavior online and offline are increasingly more intertwined; we have always-on access to information via the Internet and mobile technologies.
For example, when purchasing something online, we can quickly research it on our phones and check reviews on social media before we click “buy”.
This allows companies to have a more personal, continuous and up-to-date relationship with customers.
Other components are:
- Data collection,
- Collaboration and
With this data, companies can create more effective feedback loops with customers and use analytics to improve future offerings.
Users can be more engaged with new technologies and systems that allow them to be more “plugged-in” to the business; this could mean using wearable or simply clicking through a simple browser-based interface in order to make purchasing decisions.
Companies can collect and analyze customer data to create more personalized relationships with their customers.
In addition, companies can use new shared or open platforms to allow for faster experimentation and enhanced collaboration.
For example, companies that have an open platform can more easily invite third-party developers to develop apps that enhance their service offering.
This ultimately creates a competitive advantage over closed systems that inhibit collaboration between business partners and third parties.
This approach enables companies to respond quickly to changing customer needs by leveraging the growing Internet of Things (IoT) and Big Data technologies.
This approach is designed for companies that have embraced digital transformation, are viewed as leaders in their industries, and have sustained high performance over time.
For example, Apple has had success with this approach by creating a connected ecosystem of products and services that leverage Apple technology across the value chain.
The company’s structure encourages collaboration among various divisions in order to create seamless customer experiences across its offerings.
Apple also recognizes that its greatest asset is the skill-set of its employees; by creating an environment that encourages career development and innovation, it can cultivate a “best-in-class” culture.
Digital transformation can be incorporated into a company’s existing strategy; however, to be successful, companies must change their culture to support the new digital order.
Learning how to leverage digital technology will become critical for future success as more and more of our everyday experiences and transactions become online.
Thanks for reading the long post.