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 peopleto 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.