Traditional businesses are encountering continuous disruption in the Internet age, and savvy businesses must embrace the driving forces behind disruption or face extinction.
Speaking at the Internetix 2014 conference in Johannesburg, Saki Missaikos, Internet Solutions MD, says the principles of disruption are relatively simple, but frequently misunderstood. "Customers have new expectations, and disruption happens when a new entrant meets that expectation. We believe for SA, and the industry to transform, we have to rethink the customer experience."
High-profile examples like Uber and Airbnb are causing massive disruption in entrenched industries by simply delivering what a critical mass of people wanted, at the right place and time. Similar to Apple and Amazon before them, these companies are resonating with customers because they have prioritised the user experience above all other considerations, Missaikos says.
"It's happening in every industry: mining, retail, politics, financial. Successful disruption happens because it is relevant to the time and the people."
Technology is often viewed as the disruptor, but that is a mistake, Missaikos says. "Software becomes obsolete but the customer experience lingers. Traditionally, we speak about two models, business-to-business and business-to-consumer. But the new order is end-to-end: focusing on the complete client experience."
Take charge
But disruption should be an opportunity, not a threat. "There is a sense that disruption can happen at such a large scale that it's almost impossible to defend. I argue against that. I don't think it's that quick. It doesn't happen out of nowhere. Uber is a five-year-old business, for example." A common mistake is trying to protect the status quo, Missaikos says. "The taxi and hotel industries have filed lawsuits against Uber and Airbnb because they have totally disrupted those industries. But Blockbuster sued Netflix and we know who won that one. You can't stop what the customers want."
Mobility has been a key driver of change, Missaikos says, and South Africa, with its extensive mobile penetration, is an ideal market to foster such disruption. "It's all about the mobile-first economy, and not just about mobile-first services, but the last-second economy, delivering services instantly. You have a virtual help button in the palm of your hand. Need a cab? Push one button. Need a restaurant booking? Push one button."
The personal connection between provider and consumer is also a disruptive force, Missaikos says. Services allow consumers to rate providers, but also for consumers to be rated in turn. Perform poorly, and you'll find yourself bumped from networks and unable to summon an Uber cab or book an Airbnb room. "This is a fascinating change," Missaikos says. "These providers haven't just built a great product; they have embedded the customer experience throughout, in both directions."
Many businesses are embracing these disruptive forces, he concludes. "It's true that start-ups can architect end-to-end thinking from the start, and it's hard to re-engineer. But retailers and bankers in particular are taking the lead, and others will follow."
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