The Enterprise Strikes Back
The best companies have spent the last decade investing in their digital capabilities, becoming more powerful and adaptable organizations.
In many ways, the last few decades have been defined by the rising new breed of disruptive startups. Emerging technology has empowered a massive amount of new innovation experimentation in businesses, but legacy companies have been largely perceived as outsiders to this revolution, forever playing digital catch up. The position of many big organizations has become one of uncertainty and fear, and in many ways the boardroom has been replaced by the garage as the most powerful place in business.
But now, the pendulum is swinging back toward the enterprise. In recent years, there’s been a surge of organizations making concerted efforts to reinvent themselves as more digitally empowered companies. Disney, IBM, Intel, and others are staving off the onslaught of insurgent companies thriving in the digital era. Here are a few factors powering the new rise of the enterprise.
Increased Responsiveness
Charles Schwab is representative of a far more responsive stance by enterprises. The company worked to build out their own robo-advisor service within months after seeing the rise of startups like Acorns, Betterment, and Wealthfront. In the last decade, the best big organizations have become increasingly comfortable with new technologies. Disney, which is being continually disrupted by new media models, has transformed into one of the most active companies in the virtual reality space, recently investing in Magic Leap. Even Marriott Hotels have moved to place mobile technology at the center of their guest experience.
A Focused Outlook and Drive
It may sound subtle, but the focus on solving human problems through digital means has been transformational for many companies. IBM is in the midst of an enormous effort to become the world’s largest design company. CVS launched its own innovation lab to bring its mission of health to the digital world. Other organizations, like Capital One have added human-centered design capabilities by purchasing consultancies. Companies are becoming more intentional in their digital initiatives to adapt technologically, while maintaining a human focus.
Bigger Bets
The explosion of the new software giants (primarily GAFA) has forced insurgent organizations to make bigger bets on the future of technology and their businesses. Recently, legacy companies have become the leaders in placing big bets on the tech that may unlock the next stage of their company. GM recently invested $500 million in Lyft to ensure their place in a future with autonomous vehicles. To explore new ecommerce models, Walmart bought Jet for $3.3 billion. Even Unilever bet on experimentation with new distribution models by purchasing Dollar Shave Club for $1 billion.
What Does it Mean?
Enterprise companies are no longer playing on their heels. Once, incumbent organizations were reacting to only the most critical tech trends. But the best companies have spent the last decade investing in their digital capabilities and becoming more adaptable organizations. The next great unicorns will not come from the startup space, but from within proven legacy companies.
Enterprises must invest more readily in their own innovations and new ventures. And those still struggling to find their footing must identify strong partners who can help them move faster.
Lastly, it’s important to note that legacy business models are being radically upended as more customer experiences are moving online. Big companies that fail to reimagine the customer journey at every possible interaction point will be left behind, and those who proactively leverage their size and resources will reap the benefits in their market.
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