The Disruption Decade and How To Prosper – Dan Hodges

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It wasn’t raining when Noah built the ark.

If you want your company to weather the storm of this disruption cycle, it is essential to understand how the facts on the ground are changing for consumers and your business. We are seeing both the rise of innovation along with a cycle of business extinction. Peter Drucker warned, “The greatest danger in times of turbulence is not the turbulence itself, but to act with yesterday’s logic.”

Understanding the impact of the mobile wave is the place to start. The popularity of the iPhone created a whole new category of smartphones which consumers rapidly embraced.

Tom Daly of The Coca-Cola Company says, “For us, 2014 will mark an irrevocable integration of mobile into our business. "Take action now. Don’t wait. We are not waiting. We’ve already developed a mobile accelerator program to help us look for the next big thing. There’s nothing that we have in the pipeline that doesn’t have a mobile perspective.”

In the United States, smartphone users will increase from 140 million in 2014 to 207 million by 2017, and to 3 billion users worldwide. The growth in distribution, coupled with continuous innovation within the smartphone industry, will continue to disrupt the marketplace.

This global trend is unmatched by any other past innovation. The Mobile Wave is here to stay and it is better to ride the wave than to resist its force. Most industries will be affected. Retail is already experiencing the impact of mobile and its leaders are rapidly investing in technology and human capital to provide valuable customer experiences.

Retailers that miss this trend may not be around in 2017.

An estimated $700 billion will be influenced and transacted on smartphones alone by 2016, according to a Deloitte Study.

Advertising agencies are struggling to keep up with the disruptions caused by audiences shifting to mobile and rapidly changing consumer media consumption habits. Agencies’ historical planning and modeling tools are becoming less relevant in reaching today’s multiscreen consumers. Data management platforms (DMP’s) are being deployed at scale to manage the complexity and explosive growth of media impressions on multiple screens.

Education is going through a period of change with innovative companies such as Amplify, The Khan Academy, Coursera, Udacity, Duolingo and Nokia Life Tools. Education companies built on paper textbooks are rapidly shifting to tablets and smartphones. The paid-for knowledge market is being challenged by the free model of The Khan Academy.

Today, consumers at the bottom of the economic pyramid are benefiting from mobile learning. Nokia Life Tools gives consumers in emerging markets the equipment to learn English on feature phones for pennies a day. The coming $25 smartphone will be a game changing product as well as a major disruptive event in emerging markets.

The connection of API’s with integrated sensors and communication between sensors is the next wave of innovation in mature markets. Health innovation is fueled by the development and use of wearable sensor technology and smart clothing. Imagine that you are trying to lose weight after the holidays as your New Year’s resolution. Today’s health apps can monitor your progress and help suggest the right amount of calories consumed, exercise and sleep that will help you reach your goals.

Integrated transport is another area in transformation. We are quickly moving from a world of one billion cars to four billion cars by 2050. The current infrastructure was built for a world of one billion cars. The powerful combination of an integrated transport system and connected cars will help optimize a world of four billion cars. There will be machine-to-machine (M2M) interaction built into this connected transport grid that will help you find both the best route to take and the best place to park when you get there.

Predictive analytics at scale will grow rapidly from the mash-up of Big Data and analytics. IT departments now live in a world where 2.5 quintillion bytes (18 zeros) are produced every day, but there are not enough data scientists and data analysts to process meaningful insights that drive decision-making and investments.

What can companies do?

Training: Organizations will need to train their employees for the new ways of doing business with and reaching consumers. Alvin Toffler, author of “Future Shock,” said it well when he remarked, “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.”

Consumer research: Companies should understand how consumers are using mobile and social to find out about their products.

Marketers will need to master the use of mobile and social and their impact on brand perception, customer service, sales and retention to understand new market and product opportunities. While it is important to deliver bottom-line results, it is important to reap the rewards of innovation.

It is estimated that the majority of a company’s 2018 revenues will likely come from products and services that do not exist today, according to Gerd Leonhard, CEO of The Future’s Agency. The combination of training, research and innovation are the best ways to prepare for the rapidly changing marketplace.

Dan Hodges is Managing Director of Consumers in Motion, LLC. Dan can be reached atDan

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