23/2017 – Dealing with digital disruption
by Tan Thiam Hock
Saturday, 9 Dec 2017
EVERY time my son speaks, I have to listen very carefully. My poor brain is working overtime trying to catch his speed of thought while my eyes is speed reading his lips as my ears fail to keep up with his speedy speech. Young smart people nowadays thinks fast and speaks faster.
Perfect recipe for a communication breakdown between a father and son.
We are definitely on a different wavelength or speed of sound as Coldplay (the band) aptly describes.
So you can imagine how much I enjoyed talking separately to two seasoned entrepreneurs over dinner the last two nights. One younger than me by two years and the other older than me by 11 years.
It was not just the well rounded reasoning based on past experiences that was said to me, it was the way that it was delivered.
Deliberate, each word carefully chosen and presented in a calm tone that was soothing to my ears, the occasional pause giving breathing space for my brain to process and validate the idea or context of the discussion.
The main difference in communication between the young and older generation is the gap of patience.
From the ambitious youthful exuberance of impatience to the seemingly unhurried and deliberate patience of a successful entrepreneur.
It is a big gap that can only be narrowed through the passage of time.
On the same argument, young entrepreneurs having a higher failure as compared to a seasoned entrepreneur is all due to a gap of experience.
One can argue that if the young entrepreneur is not given a chance to fail, then how can he or she gain experience?
However the current failure rate of over 90% of all new startups is a cause for concern, causing a massive wastage of expensive capital and loss of talented youthful years to unproductive ventures.
On the other side of the coin, we have established businesses and industries being disrupted by new business models driven by digital and technological advancement.
Seasoned entrepreneurs and experienced corporate managers have seen these disruptive changes coming for some years but they have not been able to find a solution to stem the tide of change coming their way.
These leaders suffer from a gap of ability to make wholesale changes to their existing business models.
Reinvent or perish into the twilight zone.
When your know that your existing business model is going to be totally disrupted by new digital competitors, how should you react to such threats?
If you are running a licensed taxi company, what can you do to reverse the loss of drivers converting to Uber and Grab? If your print newspaper is losing advertising revenue to digital search engines like Google and social network platforms like Facebook despite your offering of print and digital content, how can you convert your business revenue model from advertising to subscription?
Do you know what to do? And if you do, how to do it? If you or your top managers do not have the ability to take the company into the new digital unknown, are you willing to step aside and allow these young digital wizards to lead your company into the future?
The experience gained from your past activities is of less relevance in predicting the future of the digital world.
Narrowing of gap in ability to deal with digital disruption will need a management team that is inclusive of both the young and the old.
Blend of feel with experience, change combined with control and youthful courage mixed with down to earth humility. Bridging the gap in ability means utilising the skill sets of the experienced with the behavioural understanding of the youthful millennials.
For companies facing headwinds in digital disruption, what is the average age of your board of directors?
If your directors’ average age is above 60 years old, chances of restructuring the business model is slim and remote.
This company will fade into the unknown as the forces of disruption will completely overwhelmed the existing business.
The attitude of “protecting what we have and let’s wait and see” will be the main cause of the downfall of the company.
Even an uncommitted feeble attempt of trying out a partial strategy in the digital world is not sufficient to withstand the onslaught of the new competitors.
Insufficient ability to change and adapt is due to the lack of understanding of how the future markets behave.
As such the owners of such companies must have the courage to be decisive and forward looking.
Bring in the millennials and let them lead your company into the new digital future.
At best, your company have a fighting chance. At worst, your company will go down fighting in a blaze of glory. At least, you have tried your best.
Besides digital disruption, the world is facing seismic shifts in many industries. From renewable energy alternatives to battery operated cars to self-driving cars to robotics, the fourth industrial revolution will see massive restructuring of industries and economies.
The new machine age requires new abilities and speedier adaptability from entrepreneurs and corporate leaders.
I am just lucky that I will not live to see all these seismic changes as I do not have the ability nor the patience to adapt and conform to the new millennium.
Since the millennials like my son do not need my experience nor my deliberate advice, I will gladly retire now to enjoy the fruits of my labour.
Leisurely chats with my learned friends over a nice glass of wine and dinner will be a nice way to bridge the gap of boredom in between the loneliness of retirement.