Most companies have accepted the new market reality: customers are in charge, having digital chops is table stakes, and disruption is becoming normal.
Although most companies have accepted this reality, they also admit that they are not prepared for it. In our Customer Obsessed Assessment, 62% of companies identified as being behind the power curve addressing current customer demands and an additional 25% are slightly behind where they want to be.
The results are not terribly shocking; there’s a lot of work to do. But it doesn’t make it any less scary once you realize we’re in the early stages of change.
The large-scale market response is still playing out – and the cycle of far-reaching (and sometimes painful) change will be playing out for many years to come. Arguably the large-scale market response is still to come. For example:
- We have seen early examples of digital disruption in select industries, but have not seen the impact of digital platforms fronted by virtual agents creating havoc for brands to retain or improve their relationship with customers.
- We have not seen the impact of industrial platforms reshaping manufacturing processes and unleashing the power of data to the strategic advantage to some – and to the strategic threat to others.
- We have not seen the global market impact if CMOs shift major chunks of budget to digital experiences and away from advertising, squeezing the agency market.
The market response will be both predictable and chaotic. Predictable in that companies understand the primary dynamics (customer + digital). Chaotic in that the overall market response is the outcome of each company’s actions and the nature and timing of those actions will vary mightily. Business war gaming will be in vogue as companies set up offensive and defensive scenarios in their own ecosystems and in the broader market.
In this next phase of market evolution, opportunities and risks will come hard and fast, and come from non-traditional angles. The ability to retool and retune your company will become a greater point of differentiation – the inability to do so will be a fatal flaw. Being good at “the now” is important – but being able to understand and adapt to “what’s next” is becoming more of a consideration.
We will need to expand our thinking: best practices are necessary, but accessing a combination of best and next practices can create strategic advantage. We see this dynamic in Forrester’s Leadership Boards where there is time and energy spent on today’s best practices, but also an increasing amount of time spent looking around the corner with our analysts so that our clients can be as predictive and nimble as possible.
Whether the analogy is chess, skiing, or as I do, mountain biking, one must see several steps ahead to choose the right tact or find the best line to win the game or simply stay upright.