Are you ready to embrace the new economy?

Companies across the world are finding their business extremely disrupted at present and it looks like things may get worse before they get better. During this time there has been a strong focus on the need for people to work from home. Business journals are full of tips and tricks on how to keep companies running when nobody is at the office, but the emphasis is always on this situation being temporary.

I believe this is wrong. The chaos may be temporary, but there has been a fundamental shift in the way that companies need to do business for several years now. I believe the present crisis is just shining a light on the difference between companies designed to operate in the new, modern, global economy and those designed for the past.

Here are just a few observations on the present-day business environment:

• Digital disruption is accelerating across all industries
• E-commerce is the new normal and this naturally creates a greater need for contact centers – because of the way customers interact with brands online rather than just visiting a store
• The need for a Customer Experience (CX) strategy has become critical for companies across all industries and this need is growing
• CX has become one of the key differentiators for many companies and a top strategic priority for CEOs
• Successful new companies are designing services around the need of the customer, not the need of the company – a shift to customer-centric design

This last point can be seen most acutely in the financial services industry. The emergence of financial technologies (Fintech) has created the ability for new companies to be designed around a specific customer requirement. Look at how Transferwise has made it so simple to manage foreign exchange or how Zopa directly connects people with cash savings to people who need a loan.

None of these companies said ‘let’s build an app that delivers loans or foreign exchange the same way as the banks do it…’ The world has changed and as this current crisis is demonstrating, there are some agile and flexible companies that can adapt and there are some dinosaurs. We all know what happened to the dinosaurs.

Your competition in 2021 may not even exist today. An entrepreneur in California or Kigali may already be designing a new app that disrupts your entire industry. If you don’t believe that a single app can transform an industry then do you remember how we used to share photographs before Instagram?

Companies with a new economy mindset are also able to transcend their industry, taking their skills elsewhere. Look at how Amazon now runs most of the Internet with their AWS or how Apple has become a major player in payments with Apple Pay – why didn’t the credit card companies do that first? Why didn’t the major taxi companies build their own version of Uber before allowing a startup to transform their industry?

This is the real story of the crisis. There is a wave of digital disruption sweeping every industry at present. The World Economic Forum has called it the ‘Fourth Industrial Revolution’ because they believe the effect on business is fundamental. You either embrace this new economy and thrive or you will simply no longer exist. It’s that simple and the history books are full of famous brands that went out of business.

Two of the fastest business trends in the world today are the need for greater digital literacy and the need for business flexibility. I would add the need to focus on customer-centricity if you want your business to succeed.

This business crisis is not just about companies having the flexibility to allow their people to work from home. It is a far more fundamental exposure of which companies can react to a change in their market quickly and which are stuck in the twentieth century.

OTTO VAN HAAREN

Otto van Haaren is Founder and CEO of 5CA.