Facebook was a prohibited word in the organization I worked a few years ago. Not only Facebook, but all the other social media were also blocked. Marketing team desperately wanted to use social media to reach new customers and advertise new products, but the company kept blocking it. Marketing, one of the important business units was hindered by the company policies and of cause they were frustrated.
The highest cost of that organization at that time was telecommunications. Employees got a bill at the end of the month on their telecommunications costs. Noticing higher costs, employees suggested moving to voice over internet (VOIP). They suggested Skype, as they knew Skype is a low-cost alternative as they were using it every day at home. Their families were in different countries, and they used Skype to call them regularly, so they were aware of the low-cost model. However, the organization was adamant, and they blocked VOIP and absorbed the massive communications costs. Net profits reduced after paying huge operational costs.
However, another company I worked recently have the travel costs as an overhead. Travelling for business was required, and the company has to absorb the travel costs, which did result in having massive operational costs. However, the company quickly decided to take advantage of the digital disruption happening in front of their eyes. They changed the travel policies to accept UBER. Internal systems and policies changed within a few months. Employees were given more options. They could use standard taxis or UBER. Most of the employees selected UBER. Employees were happy as they already used to use UBER, and now, they can extend the same for business travel. Organization reduced travel costs hence increase the profit margins. At the same time, they increase employee satisfaction.
These are the two instances to showcase how two companies responded to technological innovation. It is not that hard to understand that organizations need to think differently.
While I travel on taxies, I always talk to taxi drivers and start the conversation on ‘how UBER is changing their daily or weekly quota’. One driver nicely explained that once. According to him, “customer gets a better price using UBER because it analyses the cost based on the travel distance, competition etc. whereas standard taxies do not have such an algorithm hence the price is fixed. Customers also do not get visibility on how much they would be paying in advance; hence they prefer UBER”. He was frustrated. “My taxi company is stupid. Why cannot they implement something similar so that we can compete with UBER and still be sustainable? I am worried, we will be out of business if they do not do anything sooner”. He explained with concerns.
He was not the only taxi driver who had the same concern and worry. Almost all taxi drivers I talked about had the same concerns.
This is a simple example that organizations should be more open and think of how digital disruption is impacting them. To be frank, if they are open-minded, they can reduce their operational costs significantly and still provide a better service while increasing profit margins.
As an example, ‘TransferWise’, a money transfer service provider, who use the capabilities and low-cost structure provided by Airbnb to have offsite, team building events. Airbnb has a vast array of products, including adventure activities, to team building activities. I would prefer the same. It would be fun to have my full team at a beach house and do strategic planning. That would be impossible at a luxury hotel, in my opinion.
Technology is creating new business models. It brings us opportunities. As leaders, we should be looking into how to harness the capabilities developed by these new models. Saying ‘No’ or pretending that we will be intact is not an option anymore.
About the Author :
Anusha is an author, thought leader and a business leader in new ways of working. Business and digital transformation, Agile, Leadership coaching are her passion and expertise. Follow Anusha at her blog, the agile movement.
