Every industry and every organization will have to transform itself in the next few years, in multiple ways, or fade away.
Tim O’Reilly – Founder of O’Reilly Publishing
VUCA, COVID disruption, and risk are themes woven throughout this book. So for legacy companies, it’s the end of business as they knew it. Large company business models are disrupted by small agile companies with new ideas and new technologies. Startups develop simple solutions that can satisfy real needs faster, better, and more cheaply.
In today’s COVID world, many small businesses are not hiring. Let’s look at retail disruption or what’s called retail apocalypse. Think of the brick and mortar store that anchored your mall. The store and mall had massive fixed costs. The store had legions of workers.
Drive down any street. Retail store fronts are empty and have morphed into mobile retail trucks. Almost every type of small business with a brick-and-mortar location can morph into a truck offering mobile, specialized services such as food, house cleaning, food delivery, and almost any type of personalized service. The new truck stores give customers flexible, just-in-time service at the right, profitable price. These businesses on wheels can tailor services to a particular market and customer segment. Tech has lowered the barriers of entry so that almost anyone can develop a replicable and scalable truck business. Unfortunately, these mobile stores hire few workers.
Small companies called ankle biters challenge legacy companies that have massive fixed costs, pre-existing structure, unchanging culture, calcified management attitudes, few innovative products, and workers with medical benefits.
Work Lesson Earned: Legacy companies ridicule, ignore, or are unaware of competitive startups. They are often fossilized and can’t adapt due to their internal systems and processes that reinforce the status quo. Internal change, self-disruption, and innovation are frowned upon. Internal management says ‘this too shall pass’. Incumbents either are not able or unwilling to innovate and by the time they realize the need to adapt it’s too late. Think of the countless retail shops that have closed in your neighborhood.