You may not know it, but you have already been disrupted
The pace of change has never been this fast, yet it will never be this slow again.” So remarked Justin Trudeau, prime minister of Canada, at the 2018 World Economic Forum summit in Davos.
It’s one thing to recognize that disruption is happening, across organizations, sectors and geographies. But it’s quite another to acknowledge we ourselves have been disrupted, and therefore our business strategies and related tactics have to meet our current state, both opportunities and threats, as well as the continuing transformational disruptions to come. Are you prepared? It’s insufficient to just talk about ‘innovation’ or ‘digital’; we also have to be able to execute.
When we talk to business leaders around the globe, we find consistent agreement that we’re in a transformational time — with most believing we will see more change in the next 2-3 years than in the last 50. But too many executives also say that their companies haven’t been, or somehow won’t be, affected. Not only do we strongly disagree — we think this is evidence of a significant and dangerous disconnect. Our world has been turned upside down. Companies and industries are not just ‘in disruption’, a verb, they are disrupted — a noun! And this upheaval and transformation will continue.
So what’s next?
For starters, we need to find out what we’re missing. Too many organizations’ business models are still based on selling to baby boomers, quite possibly because the CEO population is still mostly boomers. Their strategies are based on a belief that we have always done it this way and have been successful; that boomers have the lion’s share of wealth and assets and therefore should be prioritized. But our research shows that marketing to people who have money isn’t nearly as important as marketing to those who are spending money.
Today, it’s not only boomers or Gen X, but millennials and Gen Z who are spending, and they also have influence on their parents’ wallets and the choices that open and close them. Gen X, all too often labeled a forgotten or overlooked generation, shouldn’t become your forgotten or overlooked customer. As the ‘sandwich’ generation, who are taking care of their parents as well as their children, they are most in need of products and services, and they can pay for them.
What’s more, many of them are moving into business leadership roles or already have them. They’re in their peak employment and earning years, and in spite of their history of unfortunate timing, they stand to inherit a significant transfer of wealth over the next decade. Soon, if not already, they’ll be making the decisions that will affect your organization’s future.
of global CEOs believe their organization
exceeds its customers’ expectations for
a “personalized” experience
global CEOs say emerging or disruptive
technology poses the greatest threat to
their organization’s growth
This is a time that demands new, creative and fresh thinking in the face of unparalleled disruption and transformation. It’s imperative that executives wake up and confront, and importantly define, the problem. Build strategies based on the new realities of their consumers, not just those they’ve served in the past. And then execute with both determination and discipline.
Willy Kruh, Global Chair, Consumer & Retail,
Fundamental, not fleeting, impact
To survive, every company needs to recognize the effects of these demographic shifts, shift in life events, monumental evolution in customer experience design, and the impacts and opportunities stemming from AI and deep personalization, and how technology is forever altering how we all live our lives.
Author Michael Lewis provides a useful analogy with his book about US baseball, Moneyball, in which he tells the story of how the Oakland A’s front office took advantage of more analytical gauges of player performance to field a team that could better compete against richer competitors in major league baseball. It’s the infancy of how analytics and deeper insight can win over gut instinct and ‘tired and time-old methods’. And with a team of players many other teams didn’t want, using these tactics, they won and won and won.
“This is a time that demands new, creative and fresh thinking in the face of unparalleled disruption and transformation,” argues Willy Kruh, global chair, consumer & retail, KPMG International. “It’s imperative that executives wake up and confront, and importantly define, the problem. Build strategies based on the new realities of their consumers, not just those they’ve served in the past. And then execute with both determination and discipline.”
It starts with gaining a fresh perspective on what’s really driving consumers’ choices today and how that might evolve tomorrow. With understanding the realities of our multidimensional consumers and abandoning the outdated reliance on fragments of ‘insight’ in favor of a more holistic picture. With acknowledging that we’re dealing with more demanding, empowered and informed consumers than ever before, and embracing the pace, agility and potential for revolution this may require.
Only then can companies hope to chart a course to growth that leaves their competition a distant memory. Consider the many questions in this publication and put these important tools to work for you.
Last year, KPMG released a report entitled Think like a start-up, advocating that companies should create a blank canvas and challenge whether they need to recreate themselves. The call to arms was to ask: If you had to do it over again, what would you do with your business? How would you use technology today? How would you think about clusters of consumers and which demographics would you seek to serve?
Stand still at your own risk. And stop hitting the snooze button.
We need only look to the defining moments in our own lives, to what’s influencing where and how we choose — or not — to open and close our wallets, to the behaviors of our children. Every day we’re faced with brands that exceed our expectations with world-class experiences, and those that miss the mark. It’s time to ask ourselves — which do we want to be for our consumers?
Colleen Drummond, Head of Innovation Labs,
KPMG in the US
Disruption and transformation are among the most common — if not overused — terms in today’s boardroom. However, it’s one thing to talk about it, and another altogether to act. It’s crucial for leaders to avoid the trap of acknowledging disruption, while naively presuming — or hoping — that it won’t happen to them. No company in no sector around the world can claim immunity from the implications of a changing consumer.