Friends, we wanted to take a moment to briefly share what we’ve learned working alongside preeminent global brands this year in New York, Toronto, Mexico City, Miami and São Paulo. It’s been an especially informative—and busy—few months, so let’s get right to the good stuff.
What we’re seeing
It’s notable that the rate of disruption is continuing to accelerate as predicted. To that point, the most apt expression I’ve heard in my travels was “the rate of disruption will never be as slow as it is today.” That’s nerve wracking, for sure, but it’s important for anyone, including leaders of industry, to wrap their heads around the coming onslaught of new technologies and services they’ll spawn. And we’re already seeing the impact across industries. Here are some case studies from our 2019 YTD work.
- Construction companies are concerned that clients are using Artificial Intelligence (AI) to design buildings (cutting out design costs)
- Media companies continue to report they’re “bleeding revenue,” with no end in sight
- Beverage companies know they are under increased pressure to find new ways to reach customers, many of whom have demonstrated different buying patterns
- Financial services companies report they’re at peak “disruption,” with more non-traditional banking firms coming along (See: T-Mobile Money)
Our travels have also confirmed much of what we expected: there’s growing confusion from executives about how to tackle disruption. We see many (or perhaps most) organizations really struggling to even understand where to start. The ones who do begin “innovating” are often following a typical pattern popularized by Silicon Valley—hiring expensive consultants and innovation teams, opening incubator labs and subsequently discontinuing such initiatives when returns (new revenue) don’t materialize.
If what we’re describing is akin to what you’re experiencing, then you’re definitely not alone. If there’s one silver lining, it’s that our experience tells us there’s assuredly a path forward, and we’ll be happy to provide pointers.
Mike Winters, Chief Innovation Officer, Modern Niagara (Canada)
We spent time in Toronto with Mike and some of the other leaders of Modern Niagara, a leading multi-trade building contractor in Canada. Mike walked us through the way he targets, prioritizes and gets operational buy-in for their innovation projects, and it was impressive. For each initiative, he is tracking the target/expected impact, progress, executive sponsors, regional champions and what type of innovation it is. Most importantly, Mike has integrated these innovation initiatives into Modern’s executive leadership team weekly check-in meetings where they track status and measurable impact to new revenue and cost savings combined YTD. Kudos to Mike.
Kamal Somaia, CEO, Simba Global (Australia)
I recorded a podcast with Kamal earlier this year. His innovation story/success is impressive and a lesson for all businesses. Kamal successfully achieved a ‘textile to technology’ transformation of a traditional textile business by adding RFID chips, hardware, and software to linen. This effectively allowed the one-time predominantly textile company become a tracking, data, and asset management business. Today Simba Global is a backbone to its clients that predominantly are large commercial laundries that service hospitals and hotels. By evolving from selling basic commercial textiles for a price to now becoming an asset manager of linen for his clients by adding value and transparency through the supply chain, Kamal changed his business over the last decade from $20 million sales revenue, to now managing over $200 million in goods and assets. Kudos to Kamal for recognizing the need to use emerging and transformational technologies and adding value to his clients beyond the basic goods he built the business on.
How can you transform your business by using exponential thinking and emerging technologies?
Free advice… sizing it up… We strongly recommend all organizations devote resources explicitly intended to better understand disruption and where it’s coming from. Hint...it’s going to come from outside your industry. (For example, construction firms will be in danger of losing design revenues to AI companies.)
We strongly recommend all organizations devote resources explicitly intended to better understand disruption and where it’s coming from.
This task should include a complete mind-set shift for your leadership team—first, accepting that disruption is coming and then developing necessary strategies—and the likely sources of disruption, what scale of impact that disruption will have (revenue loss), and how soon it is likely to hit.
An associated exercise is to overlay how much of your revenue has come from new business models (not product extensions) over the past three years. If you practice this mind-set shift and are concerned you’re not completely prepared, it’s definitely time to be proactive and take action. A good framework to use is the McKinsey’s 3 Horizon Framework. We often walk our clients through this framework in a working session with impactful outcomes.
Industry update - Mechanical & Electrical Contractors
In April we moderated a two-day forum in Toronto, hosted by Brad Mcaninch, CEO of Modern Niagara. Leaders of eight large North American companies were in attendance.
Modern Niagara and their spin off Aedo (a productivity platform for contractors) are impressively forward-thinking and collaborative with their peer companies. The forum was focused on gaining a common understanding of disruptive forces coming their way and what best approaches to take. Baby steps were taken toward collaboration and co-developing solutions that make the industry more adaptable for change that is coming.
Want to get involved? Let me know, I’m happy to make an introduction.
Growing need in Cyber Security…
Cyber security continues to be at the front of mind for all of our clients with the risks and sophistication of the bad guys increasing at an alarming rate. We see the best of breed solutions in cyber security and digital transformation going hand-in-hand, so we’ve decided to collaborate with Cybint, an international cyber education company, who we believe is a market leader in education, talent and tech integration solutions in this space. They operate through hundreds of cyber hubs worldwide. We spoke with its CEO and Founder Roy Zur, a retired Israeli Security Forces officer, for a recent podcast episode. Want to connect with Roy? Let us know.
Most interesting things in the news
As we mentioned earlier, T-Mobile has seemingly come out of nowhere to disrupt the banking industry. It’s now offering Money checking accounts for all its customers in the United States, which comes with a tantalizing 4.000 APY. Watch out, big banks.
China is introducing a controversial social credit system in 2020, which has raised a litany of privacy questions. Additionally, Chinese scientists have reportedly created a powerful camera that can capture images from 28 miles away—not a typo.
Finally, this piece of news comes straight from the New York Post: “A new study suggests that human brains could be merged with technology significantly sooner than many expect, perhaps ‘within decades.’” Indeed, the future is upon us.
If you’re looking for an innovation consultant to get your company where it needs to go, Pivot Factory is an advisory services firm that focuses on the trends of disruption, and how companies can react through innovation. Contact Pivot Factory today.