4 important traits of digital native businesses that enable them to stay relevant

Image: Shutterstock

Companies have always been focused on staying relevant to their consumers since it’s the foundation for business growth and success. What has changed over the past few years is the complexity and speed of change. Once established, companies needed to worry about changes that would threaten to make them irrelevant. Now, that happens in months or every couple of years. A recent example that tested relevance with global disruption is Covid-19. Organisations were tested at a short notice to operate in a virtual model and pivot their business and supply chains. Those who won were the ones who had inherent agility built into their business to use the disruption to their advantage (e.g. Amazon). Others accelerated their transformation to build agility at the core of their business by leveraging technology (e.g. McDonald’s tying up with Uber Eats in the US).

At the pace the world’s changing, staying anchored to the familiar is a risk companies can’t afford to take. They must remember that transformation isn’t the endgame. It’s a continuous loop and orientation to change to provide customer value.

What does it take to embark on this journey?

It takes courage to go past what you’re comfortable with. For businesses, it’s about letting go of the learning and the experience they’ve gained over decades. Even their employees ought to learn fast, unlearn, and then relearn, non-stop. That’s how they can create their own relevance.

Today, most established businesses function on legacy processes and organisational structures. All that’s being rewritten. Digital natives and startups are embracing the learn-unlearn-relearn mantra to thrive, and not just survive. That enables them to turn around quickly every time the market changes, with emerging technologies and evolving customer experiences. While the ambition of the past was to be big, today it’s to be fast. If you’re fast and relevant, you have a good chance to become big. Unfortunately, the reverse is not true. If you’re big but slow, you’re likely to miss the turns needed to stay relevant.

Four common characteristics are inherent in businesses that disrupt themselves and are better positioned than others to stay in the game. They’ve mastered the art of combining these traits to build the muscle required to navigate continuous change.

The Formula of Four

1) Customer is the only king
A customer-driven purpose is now imperative for companies. It creates the context for these companies to transform and encourages their employees to drive that change. Making it an obsession to focus on customer value across the organisation is the key to success. With the customer at the centre, companies can prioritise their activities with ease, pivot quickly when required, and optimise their products and services.

For instance, Airbnb’s purpose—create a world where anyone can belong anywhere—is the driving force behind the strategy in the service of their customers, the products they develop, the markets they explore, the people they hire.

2) Adopt the outside-in lens
Conventional business practices and processes are passé. It’s time to embrace an outside-in view that looks first at the customer’s need and translates that into a product aligned to that need, creating customer value. To reach that stage, it’s critical to understand the broader context and the forces driving the change, harness those forces and apply them in the context of customer needs.

This perspective enabled LEGO to prevent near-bankruptcy in 2004 and emerge as Brand Finance’s “Most Powerful Brand in the World” a decade later. Another example is Adobe. They moved to a cloud-based subscription model that saw their revenues drop initially, but registered much higher growth than before.

3) Disrupt yourself continuously
To thrive, businesses need to constantly reinvent themselves. Self-disruption entails embracing the future and building an organisation in a state of constant beta. It involves putting more emphasis on progression than on perfection, on learning than knowledge. Reimagining conventional ways of working, thinking, and organising is what it takes to disrupt businesses. Winning companies are unafraid to disrupt themselves.

A great example is Netflix which disrupted itself thrice—from mail order to a streaming company to become a content production behemoth.

4) Embrace failure as a teacher
Self-disruption is easier said than done. It involves taking risks, with more failure than success. Failing small and building big on success, taking small bets and encouraging it as an organisation-wide culture is key. Celebrating failure to the extent it taught something to build upon is a differentiator for successful digital companies.

Google+ by Google and the Fire HD Tablet by Amazon are examples of digital-native companies with a culture of constantly exploring multiple small ideas.

The last word

In these ever-changing times, staying relevant is a constant journey and not about landing with the perfect answer. This should be a quest for the entire company and not just one function or a specific level of the hierarchy. Those that get this will stay ever-relevant while others will fade into the sunset.

The author is Managing Director of Publicis Sapient, India.

The thoughts and opinions shared here are of the author.