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Avoid the digital slayer: have the courage to disrupt and reconfigure

In recent months, a number of high-profile retailers including HMV, Blockbuster and Jessops, have collapsed, with the internet cited as the overriding reason behind their failure: yet all of these businesses had a digital strategy with mature e-commerce platforms, requiring significant investment and built and operated by experts.

What they and many other businesses like them failed to do is view a digital culture as more than simply adding an e-commerce extension without fundamentally changing the rest of their organisation. Those firms which are succeeding in the digital domain have embraced digital as a core part of their corporate strategies and effectively changed shape; BA, John Lewis, Tesco and Argos have successfully implemented multiple digital touch-points such as 'click and collect', in-store wi-fi, ordering kiosks and smartphone apps, to evolve their customer's experiences and propositions.

To have the courage and vision to embrace digital means having a culture and leadership that actively seeks and encourages new ways of doing things. But where does that leave those organisations stuck in the middle, which are neither champions of the digital world nor on digital death row (yet)?

They have to grasp the following:

  • the technology-enabled market disruption we're facing is so significant that everything is being reimagined – including them, whether they like it or not

  • market disruption may not come from their current competitors – it might come from a completely unrelated sector, or even from a start-up that can now scale its success at an unprecedented rate

  • their challengers aren't just using cloud technology and SAAS (software as a service) to get ahead – they have started to enable the kind of work practices pioneered in Silicon Valley, bringing together business, design and engineering to rapidly test market ideas and make data-driven decisions.

PA Consulting Group hosted an innovation event last year, which brought together senior executives across strategy, ICT, technology and operations, all sharing an interest in how innovative approaches can influence their organisations' strategies in the next two to five years. We asked them where they thought their organisations were on the digital journey, allowing them self-classification from:

  • Dabbling in digital: communications website, marketing managed

  • Doing digital: self-service transactions online and e-commerce, new teams and skills, new revenues, have a digital strategy and are executing it

  • Digital differentiation: creating new products and services, disrupting new markets (and their own), new structures, corporate strategy is digital.

The vast majority of the organisations we talked to categorised themselves as 'Doing digital' but all aspired to 'Digital differentiation'; to do new things in new ways and move radically up the scale. When asked what was holding them back, "fear of change", "attitude to risk", "culture" and "lack of visionaries" were all cited, and we can see clearly from recent events that the greatest risk is to sit still, lag behind and not have the courage to reimagine your business. As Lionel Barber's (editor of the FT) recent all-staff email declared: "We are moving from a news business to a networked business […] It would be reckless for us to stand still […] This is not the moment to falter.

Unless organisations are bold enough to adapt, they too could be joining the likes of HMV, Jessops and Blockbuster, overtaken by start-ups. To succeed in the digital age, they must have the courage and vision to re-configure, and the boldness to disrupt others' markets – as well as their own.

To speak to a digital expert about making your business fit for the new age, contact us now.

Anita Chandraker
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Kevin O’Shaughnessy
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