Many iconic, 20th century brands that have, so far, withstood the test of time, are increasingly finding their worlds disrupted. The digital revolution – which promised to bring companies closer to their consumers – has more than delivered, but many large incumbents, which grew up in an era of mass marketing and consumption, have struggled to capitalize on the growth opportunity and get ahead.
The importance of consumer relevance
A track record of sustained success is no longer a reliable predictor of future growth or even survival. 52 percent of the companies that were included in the Fortune 500 in the year 2000 are no more. New, agile players have quickly emerged due to the level playing field that digital created. It’s broken down the traditional market barriers that once buoyed large incumbents and has enabled new entrants to disrupt established norms and business models.
Montreal is currently in the pole position, in the Top-20 North-American cities for employment growth, mainly because of its innovation hub status: videogames, visual effects, pharma, aerospace, fintech and AI are all considered “added value sectors” and have helped creating 75,000 new jobs, in 2017.
While the majority of business leaders at top performing companies agree that consumer expectations are influenced by relevant, real-time and dynamic experiences, many admit they are struggling to move quickly enough to deliver. 89 percent say that their company needs a more agile approach to doing business and agree that they need to reinvent their business to be successful in today’s challenging environment.
New research from Accenture highlights just how out of sync many large organizations are with their consumers today. 61 percent of the Canadian consumers who participated in this research switched companies last year because their needs were no longer met. Once gone, more than a quarter will never go back. Together, Canadian companies risk losing a staggering $124 billion in revenue if they fail to maintain consumer relevance.
What is the Living Business
Becoming a Living Business – a company that relentlessly focuses on anticipating and responding to fast-changing consumers’ needs at any given moment - is now critical. To succeed, it requires four key dimensions be embedded:
1. Intelligent experiences: delivered through a dynamic understanding of each consumer.
2. Responsive innovations: by ensuring their infrastructure and culture are primed to embrace new ideas, behaviours and technologies so they can respond to evolving opportunities and consumer needs.
3. Agile operating models: by acting as living organisms to break down internal siloes and deploy the latest technologies to advance performance.
4. Guided by purpose: by embracing a set of behaviours, beliefs and values that align the organization and shapes the experience of interacting with their consumers.
Canadian companies that successfully reinvent themselves are 4.5 times more likely to achieve above-average revenue and profit growth.
Transformation through 5 actions
To tap the Living Business growth opportunity, companies need to take five core actions to transform:
1. Target core and disruptive growth initiatives: It’s important that companies don’t neglect their core business in a dash to the new. They need to revitalize it, build on existing consumer relationships and generate efficiencies that can help fund new, disruptive growth.
2. Design products and services as hyper-relevant platforms: Organizations that create products and services that generate real-time consumer data are well positioned to use that insight to develop compelling new experiences that adapt to the ever-changing context and needs of their consumers.
3. Build prototypes and scale new and innovative experiences: By using technologies from sensors to social media analytics, companies can anticipate consumer needs and rapidly prototype innovative, new experiences that can eventually be scaled if they stick.
4. Scale a broad set of ecosystem partners: Collaborating with a diverse array of partners enables companies to quickly create a new type of consumer experience and value. Each player brings something new and unique to the table, such as consumers, industry experience or technology – allowing all parties to benefit from the experience.
For example, the California medical giant Varian is coming to Montreal to create an innovation center. They provide cancer treatment solutions and were looking to improve communication between researchers. For this, they have acquired Evinance Innovation to further develop on their existing platform, which helps healthcare professionals to better interact. By doing so, they will be able to adapt more efficiently their 7,000 employee worldwide organization.
5. Rewire the workforce through new technology and a culture of hyper-relevance: Companies that put consumers front and center do so by drawing on the latest technologies to mobilize the right people at the right time. They foster a culture that breaks down silos and continually seeks to better consumer relevance.
The game development company Ubisoft has developed Sam, a personal gaming assistant embedded in the Ubisoft Club mobile app. The assistant can be asked for more information about current or upcoming games, as well as provide a cross-platform rewards system for consumers who do so, and those who are very active in games. They are continuously innovating as they understand the added value in personalized interactions and rewards, instead of just relying on brand status.
Be it through strategic acquisitions or by developing home-made solutions to better reach and win consumers, a new growth strategy is needed for companies to survive and thrive in the ever-changing digital world we live in. Living Businesses are focused on continuously creating new advantages before their current strengths fade. They know that the consumers of today and tomorrow will always choose relevance – there’s no time to waste.
In Montreal, Collège de Maisonneuve is leading by example, with their new regional center for research, innovation and training, equipped with high-fidelity patient simulators. This center was created through a collaboration between actors from the health and education sectors. By recreating a very realistic healthcare environment, the center now offers internships for nursing care students, as well as provide training for CIUSSS personnel from the current partner institutions.
You can find more information on the living business here:
The opinions expressed in this post are those of the author and do not necessarily reflect those of the Chamber of Commerce of Metropolitan Montreal. As a result, the Chamber cannot be held responsible for published content.