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The economic situation is very difficult as we know on everyone and on every business, mainly the local ones. This is why the first measure that every Owner/CEO/MD is taking is reducing cost and expenses: laying off employees, stopping training programs, reducing or canceling consultancy & advertising agreements etc…this is maybe understandable because Companies are in a survival mode trying to rescue what is remaining from their business. 
But if we think differently about it for a moment, these measures will fire back because if every company be it small or big, local or regional start doing the same thinking putting their company direct interest first, the result will be affecting more and more the other companies they are dealing with and it will have a ripple effect that will return to hurt them as the whole economy suffers. 

We need to acknowledge that all the pieces of an economy are interconnected and when firms cancel a not-so-urgent investment, they are reducing revenues for a number of people who in turn will not be able to purchase the company’s products or services. It is a circular economy that acts like a boomerang.
A good example is what is happening with the banking sector. Everyone knows that if we keep rushing to withdraw cash to be saved in homes, the faster the banks collapse would be. But yet each individual think for himself without admitting that he/she is part of an ecosystem that is threatening to break down on all of us!

What should be done instead is actions driven by a solidarity spirit, trying to support as much as possible each other in this difficult time by avoiding canceling contracts, reducing wages, firing people but instead re-orienting all resources towards what is needed today, changing the priorities; the strategy not the purpose. Exploring and developing innovations & new business models that the new emerging real economy mandates.

By doing that Companies will win on the mid & long-terms as they play a wiser role in reinventing themselves while supporting the smaller providers maintaining the viability of all business sectors ecosystem, vital to sustaining the Lebanese economy .

Cutting cost, although easiest step to make, must not be done without first rethinking what the near future would look like and rather explore smart & fluid reallocation of resources, Strategic Thinking and Scenario Planning should be though off to find the right solutions that may not be obvious at first. 
Solidarity is one of those key themes that could become an overarching strategic plan that can keep us all on the boat and avoiding the ship from drowning by self-inflicted holes.

This Solidarity Theme was dominant in the October Revolution on social and human levels and should be dominant as well on Business level for Lebanon’s sake. “One for all and all for one” should be our new motto.

Carole Ayoub
Partner & Senior Consultant at Brandcell
business designbrandcell newsbranding strategybusiness strategyexperience designcustomer serviceservice designDesign Thinking


The power of scenarios


Scenarios expand your thinking




Scenarios uncover inevitable or near-inevitable futures








Scenarios protect against ‘groupthink’


Scenarios allow people to challenge conventional wisdom


Avoiding the common traps in using scenarios


Don’t become paralyzed



Don’t let scenarios muddy communications





Don’t rely on an excessively narrow set of outcomes




Don’t chop the tails off the distribution



Don’t discard scenarios too quickly


Remember when to avoid scenarios altogether


Don’t use a single variable


Some rules of thumb


Always develop at least four scenarios


“Crunch” the quadrants


There should always be a base or central case


Scenarios must have catchy names


Learn from being totally wrong


Listen to contrary voices



Even modest environmental changes can have enormous impact





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The top 6 picks for the best business strategies of all time

Best Business Strategies #1: Tesla
Playing the Long Game

Conventional business logic is that when you're starting something new, you create a 'Minimal Viable Product' or MVP. Essentially that means that you create a version of your product that is very light in terms of functionality, but just about 'gets the job done'. It also means that the first version of your product usually has to be sold at a fairly low starting price, both to compensate for its lack of features, and to generate interest in a new launch.

Some organizations (including many tech startups) take this concept even further and launch the first version of their product completely free of charge, with a plan to 'monetize' later on once they've added more features and feel confident that people will be willing to pay money for what they're offering.

Tesla on the other hand, did things completely the other way around. It's been known for a long time that Tesla's long term goal is to be the biggest car company in the world. They know that in order to become the biggest by volume, they're going to have to kill in the lower-end consumer car space - that is cars costing less than around US$30,000 to buy.

Rather than start with this market though, and create a cheap low-featured version of their electric car to achieve scale quickly (and therefore benefit from economies of scalein addition to reaching their growth goals) - Tesla instead created the absolute most luxurious, expensive, fully-featured sports car that they could muster. That car was the Tesla Roadster, and for context, the newest generation of the Roadster will retail from upwards of US$200,000 for the base model. And this was the first car that they ever produced - knowing that they couldn't achieve the necessary scale or efficiency to turn a profit (even at such a high price).

Fast-forward to today, Tesla just recently beat General Motors in becoming the most valuable car company in the world. So their unconventional strategy certainly seems to be working, but why?


What can we learn from Tesla?

The first thing to note is that Tesla have in-fact made incredible progress towards their goal of mass-produced affordable electric cars. They've even made a genuine annual profit for the first time in their history. The second thing to note is that much of Tesla's business strategy was actually forced upon it. In reality there was no way that they could have created a cost-effective mass-market electric car without economies of scale. And as a startup, they weren't even close to having those economies of scale. Furthermore, because what they were building was so unique they couldn't rely on outsourcing or partnerships to gain those economies of scale.

Actually, Tesla's supply chain strategy is one of the most brilliant moves they've made. They knew early on that batteries would present not only the biggest technological hurdle to their car, but also the biggest bottleneck to production. Rather than let this derail them however, they took complete control of their supply chain by investing in factories that made batteries themselves. This had the additional benefit of allowing them to use those same batteries in parallel business ventures such as their Powerwall.

Of course, all of these strategies required vast quantities of capital and outside fundraising (Elon is rich, but not quite rich enough to fund it all himself!). And that's where the marketing genius of Tesla kicks in. Except that for the most part, their marketing efforts are only partially about the cars themselves. It's Elon Musk's personal brand that had more sway on whether or not they got the investment they needed. He's smart, divisive, wild and ambitious. But whatever you think about Elon Musk, you'd be hard pressed to traverse more than a couple of consecutive news cycles without seeing him on the front page. And that's a fantastic recipe for getting the attention of investors.

Best Business Strategies #2: AirBnb
Forgetting all about Scalability

I love the story of Airbnb. We know them today as one of the fastest growing tech companies, valued at over US$38bn, who have changed the way we travel probably forever. But did you know that they started out about as low tech as you can get?

The first Airbnb rental that ever took place, was the renting out of 3 air mattresses on the floor of co-founders Brian and Joe's apartment. They made $80 per guest. It seemed like a great idea for a startup, so they put up a website and started inviting other people to list their own mattresses for hire.

They got a few bookings here and there - but for the most part, things didn't go well. So much so, that in 2008, they resorted to selling cereal to make some extra cash.

They had plenty of listings on the site, and plenty of site traffic - but too few people were actually making bookings. They were frustrated about the lack of effort they perceived in the listings people were making. So they took matters into their own hands.

The co-founders grabbed their camera, and went to knock on the doors of each and every one of their NYC listings. When someone answered the door, they would persuade the owner to let them in, and then take a ton of photographs of the inside.They touched up the photos a bit and uploaded them to the website in place of the old photos the owners had taken. Within a month of starting this strategy - sales doubled. Then tripled. Then....well, the rest is history.

best business strategies

What can we learn from Airbnb?

The thing I love the most about this story, is that it confounds one of the most commonly stated principles of building a tech startup - that you must make everything scalable. What Brian & Joe did was anything but scalable. But it got them enough traction to prove that their concept could work. Later, they did find a way to make this solution scalable, by hiring young photographers in major locations and paying them to take professional photos of owner's listings (at no charge to the owner).

Best Business Strategies #3: Toyota
Humility can be the Best Business Strategy

In the year 1973, the 'Big Three' car makers in the USA had over 82% of the market share. Today they have less than 50%. The main reason for this, is the aggressive (and unexpected) entry of Japanese car makers, led by Toyota into the US market in the 1970's.

Cars are big, heavy and expensive to move around. That's one of the reasons why the US market was so surprised when Toyota started selling Japanese-made cars in the US, at prices far lower than they could match. The car industry was a huge contributor to the US economy, so one of the first reactions from the government was to implement protectionist taxes on all imports of cars - thus making Japanese cars as expensive as locally made cars.

But the tactic failed. Within a few years, Toyota (and by now others too) had managed to establish production plants on US soil, thus eliminating the need to pay any of the hefty new import taxes. At first, US car makers weren't all that worried. Surely by having to move production to the US, the production costs for the Japanese car makers would rise up to be roughly the same as those of the local car makers. But that didn't happen. Toyota continued to output cars (now made locally on US soil) for significantly cheaper than US companies could.

Their finely honed production processes were so efficient and lean that they were able to beat US car makers at their own game. You've probably heard of the notion of 'continuous improvement'. In the world of manufacturing, Toyota are pretty much the grandfather of exactly this.

best business strategies

What can we learn from Toyota?


Toyota proved that knowing their own weaknesses can be the key to success - and be one of the best business strategies you can ever deploy.

Not just that. Can you name a single famous executive at Toyota? I can't. And one of the reasons is that Toyota's number one corporate value is humility. Not even the most senior plant executives have named car spaces of their own. The humility that helped them to crack the US market runs deep in the organization, from the executives to the assembly workers.

Best Business Strategies #4: HubSpot
Creating an Industry then Dominating it

HubSpot aren't as famous as Airbnb or Toyota. But, they're worth over US$2bn, and more impressively, they've achieved that valuation in an industry that didn't even exist before they invented it themselves. That industry is known as 'inbound marketing'.


This was a big deal. I can tell you from personal experience, that 'interruption marketing' is really really expensive. We pay Google around $10 each time someone clicks onto one of our AdWords adverts. Remember, that's $10 per click not per sale. That adds up pretty fast. On the other hand, this blog receives approaching one million clicks per year - at a cost of zero. I've written before about how inbound marketing basically saved our business - so it's fair to say that this example is pretty close to my heart!

They coined the term 'inbound marketing' - and long story short, they're now one of the biggest SaaS companies in the world. But that's not the interesting part of the story.

best business strategies

What can we learn from HubSpot?

The interesting part of the story is this: HubSpot created a new type of marketing. They then used that type of marketing to market their own company, who's sole purpose was to sell a platform that created that new type of marketing. Head hurting yet? Mine too.


Best Business Strategies #5: Apple
iPhone Launch Shows Tremendous Restraint

Ok I hear you - this is such an obvious inclusion for the 'best business strategies'. But as one of the first people to adopt smartphones when they came out in the 1990's this is something else that's pretty close to my heart. I remember using Windows Mobile (the original version) on a touchscreen phone with a stylus - and it was horrible. I loved the fact that I had access to my email and my calendar on my phone. But I hated the fact that my phone was the size of a house, and required you to press the screen with ox-like strength before any kind of input would register.

Thankfully, a few years later, BlackBerry came along and started to release phones that were not only smart, but much more usable. Sony Ericsson, Nokia, HTC and a whole host of other manufacturers all came out with reasonably solid smartphones, all well before 2007 when Apple finally released the iPhone.

I remember arriving at the office one day and my boss had somehow gotten his hands on one of the first iPhones to be sold in the UK. I was shocked. Normally I was the early adopter. I was the one showing people what the future looked like. And yet, here was this guy in his mid 50's, with his thick glasses, showing off a bit of technology that I'd never even seen before.

And that is the masterstroke that is the iPhone. The reason why every single smartphone I'd ever owned had sucked in comparison to the iPhone, is because there's no real market in selling phones to geeks like me. We're too few and far between - and either too poor or too stingy to drop any real cash on new tech. Apple could easily have created a phone much earlier than it did and sold it to me. But it didn't. Instead it waited until the technology was mature enough to be able to sell to my boss. Someone who is far less tech savvy than me. But also far more financially equipped.

best business strategies

What can we learn from Apple?

The big learning here is that first mover advantage is often not an advantage. A well executed 'follower' strategy will outperform a less well executed 'first mover' strategy every single time. One of the most common misconceptions in the startup world is the concept that it's the 'idea' that matters the most. The truth is, the world's most successful companies were rarely the first ones to innovate. I'm looking at you Nokia. At you Kodak. And at you too, Yahoo.

In fact, being first is probably a disadvantage more often than it's an advantage. Why?

  • Your market isn't well defined and doesn't even know your product type exists
  • If you have a market, it's probably the early adopters - by definition, that's a niche market

People, and especially tech companies, get carried away with being first. But you need to think very seriously about whether 'first mover' or 'smart follower' are the best business strategies for you.

Best Business Strategies #6: PayPal
Daring to Challenge the Status Quo


Banks are old. Their business models are largely unchanged in hundreds of years, and they make huge amounts of profit, without actually making a single thing. They're insanely powerful and almost impossible to displace. But for some stupid crazy reason - PayPal didn't seem to care. I can tell you from personal experience (I worked for a bank), that the name that strikes the most fear into the executives of the banks is PayPal.

Here's why:

  3. When a customer buys with their PayPal account, the bank has no clue what the customer actually bought. The transaction appears on the bank statement as merely 'PayPal'.That gives PayPal all the power when it comes to data mining.
  5. PayPal refuses to partner directly with banks - instead opting to partner with retailers directly.

In a very small space of time, PayPal has managed to insert itself as a whole new method of payment on the internet (and offline) - giving a very real alternative to your trusty debit or credit card. But how the heck did it manage to do it? Let's take a look at why PayPal had one of the best business strategies ever.

best business strategies

What can we learn from PayPal?

There are two huge pillars of success to PayPal's story. The first is simple - stone-cold balls. They got a fairly lucky break when they accidentally became the favored payment provider for eBay transactions. This was followed a few years later by their US$1.5bn acquisition by eBay themselves. eBay were smart enough to mostly leave them alone, and their newfound sense of boldness saw them strike a series of deals with other online retailers to try and replicate the success they'd had with eBay.

This is where the second pillar of their success comes in. Partnerships. Banks had always been wary about forming partnerships directly with retailers - instead they relied on their scheme partners (Visa / MasterCard) to do that for them. They didn't want the hassle of managing so many different relationships, and were extremely confident about the fact that credit and debit cards would always be at the heart of the financial payment system. But the problem was that MasterCard themselves were already working on a partnership with PayPal. Leaving the banks out in the cold. Today, PayPal commends an amazing 20% market share of online payments in the US - and 62.7% of the eWallet space. Almost all of that growth has come from their direct relationships with merchants large and small.

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How can you today in Lebanon build a strategic plan for your company if you don’t have certainty about the future? what should Lebanese retailers, Mall owners, industrials, distributors and services providers do in the wake of the systemic shifts in the economy post-crisis?
That’s like laying the foundations of your house on a ground that might move or shift in any direction as you move towards the future.

The reality is that today every Lebanese organization is finding extreme difficulties in formulating what should be their next decision and what will the future holds.

Shall we continue to wait & see? Will our business shrink? Should we start looking into alternatives & substitutes? Which ones? What could be the legal & financial restrictions impacts? Etc.
We all normally agree that decision making should be based more on data and analysis than simple intuition and gut feelings. But there are two problems here: First, data and information will be difficult to gather as things change by the hour. Second, in the current country turmoils, previous data will tell us more about the past but gives us absolutely no indication about the future.

Make it Plausible with Scenario Planning.
Scenario Planning is not about predicting the future in a crystal ball but making assumptions on what the future is going to be and how your business environment will change overtime in light of that future. Scenario Planning aims to define your critical uncertainties and develop plausible scenarios in order to discuss the impacts and the responses to give for each one of them.

Among the many tools a manager can use for strategic planning, scenario planning stands out for its ability to capture a whole range of possibilities in rich detail. By identifying basic trends and uncertainties, management can construct a series of scenarios that will help to compensate for the usual errors in decision making — Low or overconfidence and tunnel vision.

The issue could be a narrow one: whether to make a particular investment, for example, Should a supermarket put millions into more out-of-town megastores and their attendant car parks, or should it invest in secure websites and a fleet of vans to make door-to-door deliveries?
Farmers use scenarios to predict whether the harvest will be good or bad, depending on the weather. It helps them forecast their sales but also their future investments. The scenarios that Royal Dutch/Shell used to anticipate the drop in oil prices in 1986. The scenarios a major computer manufacturer used to navigate its transition from products to services. The scenarios Xerox used to anticipate the convergence of the copier and printer or American Express used to deal with the replacement of traveler's checks by credit cards. Each organization needs its own scenarios to face its own challenges.
Other well known examples include when blue chip companies explored the end of the Berlin Wall, OPEC oil price rises, bombs and terrorist attacks. Asking the great What if? helps Identifying risk and opportunities that could arise from such events puts companies in a better situation to adapt & thrive.

So how to use scenario planning?

As you can see from the above illustration, scenario development process holds 4 critical steps. After identifying the driving forces and critical uncertainties for the months or years to come, the objectives is to develop 4 distinct scenarios that are most likely to happen. The best way to perform all of these steps is to organize workshops during which all the participants brainstorm together, it will help you find creative solutions.

The process to create scenarios is to:
  • Identify your driving forces: To start, we discuss what are going to be the big shifts in society, economics, technology and politics in the future and see how it will affect your company.
  • Identify your critical uncertainties: Once we have identified your driving forces and made it a list, pick up only two (those that have the most impact on your business). For example, two of the most important uncertainties for agribusiness companies are food prices and weather forecast. 
  • Develop a range of plausible scenarios: The goal is now to form a kind of matrix with your two critical uncertainties. Depending on what direction each of the uncertainties will take, we are able to draw four possible scenarios for the future. 
  • Discuss the implications: During this final step, we discuss the various implications and impacts of each scenario and start to reconsider your strategy: set your mission and your goals while taking into account every scenario.

If you're interested in learning more about how to do scenario planning, how to get alignment on your strategic plan, or learn how to lead your team through the process with our help, do contact us today!

Joe Ayoub- brandcell consulting
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In February I wrote an article describing how even if political stability is ensured, it will not solve the economic crisis and companies turmoil unless some radical mindset shift is operated.
Today we are in the middle of a mega multi-sided crisis (political-financial- social), the post- October 17th Lebanon will not only witness a radical shift in political, macro-economical & social aspects but also and especially in business.

Companies have to accept that that it will not be able to re-ignite their operation with a 'Business as usual' mindset. The young generation that defied the legal authorities and shook the grounds beneath a corrupt and outdated system will do the same inside the institutions where they work. They will demand transparency, equality, rights to learn & progress and be aware about the vision & purpose of their entreprise.

On the other spectrum, companies that innovate in terms of employee engagement and business models will reap unique competitive advantages. therefore, it is imperative to connect these two facets in a new social contract to liberate new energies and certainly new growth opportunities that will benefit both stakeholders.

How can that be accomplished? While businesses are in the 'wait & see' mode for political solutions, they must urgently use this time to rethink their modus operandi on all levels:

What are the opportunities to change & innovate that you would not have done in normal circumstances due to inertia and lack of time?
  1. Will your value proposition be relevant in the post-thawra time? do you need to shift your model from products-to-service-to experience or vice-versa? are the current channels to market still viable or you need to explore new more cost effective ways (digital & other)
  2. Will your Strategy stand within the new market changes? What new offerings, new customers or Customer Experience can you design & develop with the current ressources & capabilities that you acquired?
  3. How can you re-allocate your human & financial resources to support the new directions? How can you leverage your key people to play an active part in shaping the company of tomorrow? what skills they need in strategic thinking and analytics?
  4. What new partnerships you can forge to spread risks and explore new market potential?
The common answer to all the above is INNOVATION. Not in terms of technology or invention as some might think of it but in terms accepting and applying new mindset, methods, tools & approach to solve such problems that this crisis unleashed upon the country. Traditional thinking & solutions will simply fail to address these wicked challenges.

The new solutions will have to be designed around:
  • Empathy for employees and customers
  • Co-created with employees and customers
  • Prototyped to fail quickly & learn fast
  • Implemented with utmost engagement and with appropriate systems & procedures.
The good news is that you are not alone. You can always get the help of experts and we at Brandcell amongst others have been helping progressive companies to thrive in difficult & unpredictable times by showing what strategy & innovation can do to unlock new growth so that times of troubles are turned into opportunities.

Joe Ayoub- Brandcell consulting
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innovationbusiness designbrandingbusiness strategybrandcell articlescompany cultureBusiness Model Innovation

Challenges organizations face in adopting analytics





Capturing impact from analytics






Examples of impact





Winning the talent war




Developing the right expertise




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1. Starbucks





2. Burberry






3. McDonald’s




4. Spotify




5. The North Face




Machine Learning and AI Platforms Are Helping Shape the Modern Experience

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It’s time to take today’s technological threats seriously and change the way you do business.
If you haven’t noticed, a high-stakes global game of digital disruption is currently under way. It is fueled by the latest wave of technology: advances in artificial intelligence, data analytics, robotics, the Internet of Things, and new software-enabled industrial platforms that incorporate all these technologies and more. Every enterprise leader recognizes that, as a result, the prevailing business models in his or her industry could drastically and fundamentally change. A wide range of industries, such as entertainment and media, military contracting, and grocery retail have already been profoundly affected. No enterprise, including yours, can afford to ignore the threat. Yet most companies are still not moving fast enough to meet this change. Some leaders are still in denial about it, some are reluctant to upend the status quo in their companies, and some are unaware of the necessary steps to take. But these excuses are not good enough.

If your company is aleady struggling, then digital disruption will accentuate your problems. You may not have needed a plan for the new digital age yet, if only because it didn’t seem relevant to your industry. But you will need it now. Otherwise, no matter how well you run your business, it will not produce results at a scale that will allow you to compete. The companies with a clearly differentiated identity — those that stand apart from the crowd — are in the best position to thrive. For every company, this is an immense opportunity to rethink every aspect of the business, and chart a bold path for success.

Disruption, by our definition, means a shift in relative profitability from one prevailing business model to another. The dominant companies, accustomed to the old approach, lose market share to a new group of companies. Not every disruption is driven by advances in technology, but this one is. And because the software fueling this transformation can be applicable across traditional industry and business function boundaries, competitors can emerge from seemingly anywhere. In sector after sector, new entrants are lowering prices, meeting consumer needs in novel ways, making better use of underutilized assets, and hiring people with broadly relevant digital skills, who have collaborative, creative, and efficient work styles.

If you’re skeptical about this, it’s probably because you’ve seen digital technology appear before, without much of an effect on your core business. Even industries that feel pressure will not be completely trransformed. No matter how many people order their paper towels and canned soup online, for example, there will continue to be some brick-and-mortar grocers.

But the wave of disruption that’s cresting now is more comprehensive and far-reaching than any previous wave. Consider what has already happened to less physically based industries, such as media and entertainment. They have had to rework their business models, seeking revenue through social media and new forms of consumer engagement. Industrial and manufacturing companies are following a similar path: embedding logistics systems with sensors, linking supply chains with shared data and robotics, opening the door to innovations in energy and materials, and changing the way that every product is made and delivered.

Your shareholders (particularly activist shareholders), customers, and employees expect you to respond quickly. But panic and full-bore opportunism, in which you pursue every seeming source of revenue, will not work either. The answer is to develop a coherent strategy, seeking out the options that fit best with what you already do well. Here are 10 principles for accomplishing this, drawn from the experience of companies that have done so.

Recognizing the Change

1. Embrace the new logic.
When you first hear about a new digitally enabled competitor, you may tell yourself that company can’t succeed. It’s operating in a narrow niche, and it won’t be profitable at scale. Hundreds of executives of established companies have made this mistake, dismissing such innovations as the photocopier, steel mini-mill, graphical user interface, smartphone-embedded camera, and video streaming service. Instead, view each upstart competitor as a company you can learn from.

There’s always logic behind a new entrant’s business model, a reason it is being introduced. It meets customer needs more effectively than you do (see principle number 4), offers consistently lower prices (principle number 5), or makes better use of assets (principle number 6). Chances are, it does all three. For example, Zume, which makes pizza to order in its oven- and robot-equipped trucks, delivers fresh, inexpensive food to people’s homes rapidly. As of October 2017, it had raised more than US$70 million in venture capital. Although no one can predict whether Zume or another contender will succeed, the general logic of vehicle-based fast-food represents a major threat to low-cost restaurant chains. The very existence of potential disruptors in your industry — especially if they are funded by venture capital — is a sign that your business model is regarded as obsolete. It’s up to you to figure out why, and how you can change it.

In addition to studying your new competitors’ logic, look closely at the assumptions embedded in your company’s current business model. Keep in mind what you know digital technology can do for you. How could you redesign your capabilities to deliver better value than your competitors can? What aspects of your business model could you change to deliver better value, on a grand scale, than any upstart could? What would you have to do differently to make your own disruption work?

Best Buy went through a thought process much like this, and became one of the very few specialty retailers to compete successfully against online retailers such as Amazon. Among the disruptive factors it had to deal with, as New York Times reporter Kevin Roose put it, was “showrooming: customers were testing new products in stores before buying them for less money online from another retailer.” Best Buy chose to disrupt its own business model with a price-matching guarantee, a renewed emphasis on customer consultations (building on its “Geek Squad” experience), new workforce policies to gain a more skilled and loyal employee base, and improved logistics that integrated its online and in-person experiences. (In effect, manufacturers now pay to be included in Best Buy’s “showrooming” array.) These elements added up to a powerful new approach for Best Buy that raised its stock price more than 50 percent in 12 months.

2. Start now, move deliberately.
You have to balance moving reactively and acting strategically when the signs of pending disruption first appear for your industry. “We always overestimate the change that will occur in the next two years,” wrote Bill Gates in his 1995 book The Road Ahead. “And [we] underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.”

To be sure, it may take a year or more for customers to change their habits at a scale that affects you financially. During this period, you are still relying on your old business model for earnings. But if you don’t start visibly taking steps to change that business model right away, it could affect your company’s market value. Investors are gauging your effectiveness based on their perceptions of the digital threat approaching your industry. If they consider you unprepared, they will have reason to pounce.

At the same time, you have to proceed deliberately and strategically, rather than frantically and reactively. Panic is contagious. You are not looking for quick opportunities — you are plotting the new trajectory of your company. Use this time to develop your own sustainable, digitally enabled value proposition, to build out your own distinctive capabilities, and to sell off or shut down the assets you will no longer need when the disruption fully takes hold.

Be bold and openly declare your intentions. Make it clear to your constituents — not just investors, but employees, suppliers, distributors, and other members of your business ecosystem — that you are preparing your own disruptive innovations. Continually reevaluate and refine your new approach, adjusting it to reflect changes in customer behavior and in your industry. Prototype new products and services and take them to market quickly, testing them with real customers. Bring the best ideas to scale.

When your industry’s changes finally reach a tipping point, it will seem sudden to everyone else. But you’ll know better. Because of your early start, you’ll be ready with the capabilities you need. You can then move fast, seize the advantage, and lead your sector.

Amazon has provided an example of this approach since the 1990s. Starting with books, then branching into other types of retail, and ultimately moving into general logistics and cloud-based computer services, it always had the same game plan: to expand gradually, taking on challenges when it was equipped to do so. It took Amazon 20 years to build up the requisite capabilities to master grocery delivery, an extraordinarily difficult challenge because fresh food can easily spoil. By contrast, Webvan, which also began in the late 1990s, started out with a home food delivery concept, overextended itself trying to cover the then-too-expensive “last mile” to the customer’s door, and went bankrupt.

Building Your Identity

3. Focus on your right to win.

A right to win is the ability to meet challenge after challenge with a reasonable likelihood of success. Instead of relying on a single product or service to define your business, develop a strong identity — a recognizable expression of what your enterprise does well and why it matters — that makes your company truly distinct. Don’t abandon your old business model entirely; build on your existing strengths. In many disrupted industries, the new and old business models continue to coexist: Brick-and-mortar groceries will not go away entirely, just as bric-and-mortar bookstores have not. Combine those core capabilities to create one consistent approach that applies to everything you do. Like Amazon, Apple, IKEA, Starbucks, or other iconic companies, you will send a strong, steady signal of who you are and what customers can expect from you. Or as Harvard Business School professor Clayton M. Christensen, who developed today’s prevailing concept of disruption, put it: “Decide what you stand for, and then stand for it all the time.”

One company that has gained a right to win is PetSmart, a retailer of pet products and services. In April 2017, PetSmart made the largest e-commerce acquisition in history. It acquired, a pet supply site, for $3.35 billion — just a bit more than Walmart paid for the online store around the same time. Chewy provided customer service capabilities that complemented PetSmart’s extensive retail store network and its multiple services (such as boarding hotels, grooming salons, and walk-in pet clinics). Chewy offered a high level of customer interaction, comparable to that of premium retailers such as Nordstrom. The company calls customers proactively to address service problems, and sends cards to thank people for their business. These combined capabilities give PetSmart and Chewy a much clearer identity and way to compete.

You gain your right to win by building and maintaining a system of distinctive cross-functional capabilities — combinations of people, knowledge, IT, tools, structures, and processes, refined and developed over time. To preeminent business historian Alfred D. Chandler Jr., this “integrated learning base” was the single most important factor for business success. You already have some of those capabilities, or you wouldn’t have gotten this far, but you may need to develop or acquire others, as PetSmart did. Orient your business around those key capabilities. Make long-term investments to support them, and divest businesses that don’t fit.

Another prominent example is Honeywell. In the mid-2010s, its right to win enabled Honeywell’s heating, ventilation, and air conditioning (HVAC) business to beat back a disruptive threat from Nest and other digital thermostats. Honeywell had a strong distribution capability; its people knew how to maintain strong relationships with HVAC installers and contractors, who referred customers to Honeywell’s digital thermostats instead of those from the startup. This gave the company time to bring its technology up to date.

4. Create your customers’ future.
What does your customers’ future look like? Think about meeting their needs in a more fundamental way, so that they continually want more contact with your company and its offerings. Your mission, as Steve Jobs told his biographer Walter Isaacson, “is to figure out what they’re going to want before they do.” This will require imagination and insight; they won’t be able to articulate it if you ask them. Creating your customers’ future may require an obsessive focus on them. Make their problems go away. Remove the friction in their lives. Make things easier and less complex, while reducing the price they have to pay.

The most effective consumer-oriented companies rely on privileged access to their customers. For example, IKEA has an extensive program for sending executives to the homes of customers, who welcome them because the company has enhanced their daily life. You can also learn a great deal from co-creating your products with customers, involving them in design and development. Adobe Systems, for example, routinely consults with graphics professionals in designing new packages for them. Google and Facebook had a huge advantage in the large number of sophisticated early adopters in their own workforce. The companies continually sampled their employees’ reactions and adapted their offerings accordingly.

As marketing experts have pointed out since at least 1960, when Theodore Levitt’s groundbreaking Harvard Business Review article “Marketing Myopia” was published, customers are most compelled by outcomes: the results your products and services deliver, rather than the products and services themselves. This was how Philips profited from its halogen bulbs, the kind that retailers install in parking lots. Concerned about losing out to makers of lower-priced commodity bulbs, Philips set up a service to change the bulbs when they burned out, and continued its R&D on longer-life bulbs so the costs of that service would go down. Similarly, GE’s aircraft engines, Daimler’s trucks, Tesla’s electric cars, and Siemens’s power systems are all embedded with sensors, designed to provide analytics about not just the machines’ behavior (for better maintenance) but what the customer (the airline, truck driver, or power utility) is doing day after day, and how that experience might be improved.

5. Price to drive demand.
Nearly every significant disruption reduces costs in some way. Customers respond more powerfully to cost reduction than to other types of increases in value. When you set your prices low, you attract customers, scale up your new business model, and force changes that make it more difficult for rivals to compete.

Even high-profile disruptive competitors do not dramatically affect the rest of the industry until they become competitive in price. For example, it was only with its launch of the “affordable” $35,000 Model 3 in 2017 that Tesla began to compete with a wide range of other automakers. For most products and services, it’s best to build your response to disruption by lowering costs and looking for a larger customer base. Often this means using digital technology in inventive ways. Sometimes, as with Amazon and Uber, it involves pricing at a loss for the sake of long-term scalability and market share.

Undoubtedly, you are already diligent about reducing costs. But you may not have gotten in the habit of strategic pricing: cutting costs to drive up demand. A notable example is IKEA, which builds a 1.5 to 2 percent product price reduction into its budget planning every year, as a forcing function. This requires its planners to figure out how to reduce costs significantly, and it has created the kind of customer loyalty that no disruptor can dislodge.

6. Profit from overlooked assets.
Many digital disruptions take advantage of assets that have been underutilized. This approach is feasible because of the way digital technology reduces friction and reveals options. The sharing economy businesses that sell access to unused time in privately owned automobiles, production plants, homes, and office spaces changed their industries by monetizing their assets’ previously unused capacity.

You, too, can disrupt your industry, by identifying ways to create value from underused assets. These may be found anywhere in your business. With a cloud computing installation, you may make more effective use of your computer processing power — and your programmers’ time. Or consider the stockroom of a big-box store. The space is big because of the scaling factor of labor. Once you have paid for the cost of putting in one pallet, putting in the next four is quite cheap. Because digital interoperability makes it easier to process multiple materials and products from multiple vendors, why not share back rooms and warehouse staff?

Overlooked assets don’t have to be physical. They can include proprietary information, continually gathered data, or specialized expertise. For example, the Aravind Eye Hospital in India is one of the most effective cataract treatment centers in the world. It values professional expertise as a specialized asset. Each surgeon treats 10 times as many cataract patients per day, on average, as a similar surgeon would in the United States. The hospital, whose processes were modeled after those of McDonald’s, uses every means possible to focus a skilled surgeon’s time where it matters most: on the cataract operation. Everything else, including administrative work and referrals of complex cases, is handled by someone else.

It may take time to develop a compelling and profitable approach to your assets. The first shared office space enterprises emerged in the early 2000s, but it wasn't until the mid-2010s that companies such as WeWork landed on a format and package that brought the concept mainstream. While you are developing your own approach, consider divesting the assets that hold you back or require ongoing costs. Every asset you own should contribute to, or benefit from, your differentiating capabilities.

7. Control your part of the platform.
Disruptive companies don’t do everything themselves. They rely on the capabilities provided by others. Those capabilities will be more widely available as vast business-to-business platforms emerge: platforms such as Amazon Web Services, GE’s Predix, Siemens’s MindSphere, and the emerging Chinese “Belt and Road” system. A platform is a group of interoperable technologies that provide a basic infrastructure into which applications and processes from a host of companies can fit, working together seamlessly. The new digital platforms will help transform enterprises in the same way that their online predecessors, such as Google, Facebook, and Amazon, helped change consumer habits. A platform provides access to others on the platform, new ways of creating value from digital assets, and a much greater scale at minimal cost. Just as it’s vital to know what your company is best at, it’s critical to know where you can rely on others’ technology and solutions.

Some companies thrive by becoming platform providers. Salesforce, for example, has used its capabilities in developing software-as-a-service and other cloud-based offerings to build an open ecosystem for sales and customer relationship management that gives the company a distinctive competitive advantage. By incorporating independent developers, system integrators, and consultants into the Salesforce ecosystem, the company has become a hub for a vast number of innovative businesses in multiple sectors, giving Salesforce unique access to information and leading trends.

But you don’t have to own platforms to profit from them. Instead, focus on a part of the platform that gives you a right to win and establishes stable standards for an entire ecosystem. For example, if you are one of many component manufacturers for, say, servers or home-control devices, or one of many developers of similar software apps, you may lose value. But if you carve out a distinctive identity and role within other companies’ ecosystems, you can still draw value to you. You can be like Corning, manufacturing the Gorilla Glass used in the iPhone, along with many other kinds of specialty glass used for automobiles and other smartphones; or like HCL Technologies, which has parlayed its distinctive R&D and consultation capabilities into a refined outsourced technology business serving other high-tech companies.

Because digital technology blurs boundaries among industries, you should use platforms to break free of the constraints of your sector. It is no longer necessary to manage your own supply chain to connect with suppliers and distributors. Apple, famously, is in music and video streaming, information technology hardware and software, Internet services, telephony, timepieces, digital photography, and retail. It is number one in most of those businesses. It doesn’t matter anymore what sector you think Apple is in; Apple is number one at being Apple. It has consolidated its market around one distinct identity.

Choose carefully the platforms you join. Once you are intertwined with them, there may be enormous switching costs if you need to change. Protect your control over your customer data, intellectual property, and distinctive capabilities system.

There may still be an advantage to integrating vertically; as Inditex (Zara), Amazon, and Haier have discovered, it can provide opportunities for differentiating your company. But the best option is to make a more fine-grained assessment of your costs and customers, and design your mix of vertical and horizontal activity accordingly.

Bringing Your Future to Life

8. Integrate, don’t isolate.
The perception that disruption is imminent has many executives scrambling to launch digital side projects in the form of programs, products, and services that can stand on their own. There are many evocative nicknames for these mini-enterprises and isolated projects: Skunkworks. Pirate ships. Special forces. Labs. Quarantined units. The names convey the problem: a basic lack of connection between this subscale unit of activity and the core enterprise.

To be sure, “pirate ships” have more freedom than the rest of the enterprise. They avoid the usual restrictions and requirements, the cultural antibodies that hamper creativity. They can even generate innovative products and services that seem to be the wave of the future. But because they are not integrated with the rest of the company, they don’t have the capabilities or support they need to be sustainable. Nor does the core business learn from them or benefit from their capabilities. Even if it succeeds in a narrow context, a pirate ship dissipates resources and makes it more difficult to go to scale with a new digitally enabled business model. In the end, transformation doesn’t happen in silos; it requires an enterprise-wide digital effort.
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Dembracing digital transformation is key to survival in today's business world. Find out how these companies succeeded where others failed.
Bon-Ton, Radioshack, Toys "R" Us, IHeartMedia--these are just a few of the companies that filed for chapter 11 in the past year. Both the retail industry and media industry have struggled to keep pace with our evolving digital world, but many other industries are facing similar challenges.

However, where some companies are failing, others are making tremendous strides forward. There are many traditionally based businesses--companies that have been operating well before the Digital Age changed everything--that have embraced digital transformation with open arms. These companies have incorporated omni-channel shopping experiences, invested in IoT sensors, leveraged data analyzation, and more. Their leadership is not afraid to shake up the status quo while keeping a keen eye on future tech and trends. So, even though entire industries may be facing disruption on many fronts, these companies have found a way to beat the competition and continue delighting their customers.

Here are just a few examples of companies that have successfully leveraged digital strategies to thrive in today's hyper-competitive markets:

New York Times
Twenty years ago, if you hopped on the subway during rush hour in Manhattan, you'd be surrounded by people with their noses buried in newspapers. Today, however, everyone's attention is glued to their phones instead.

Digital has been killing the media industry--particularly publishing and newspapers--for over 15 years now. According to The Atlantic, "Between 2000 and 2015, print newspaper advertising revenue fell from about $60 billion to about $20 billion, wiping out the gains of the previous 50 years."

But one newspaper managed to navigate these turbulent waters by embracing digital. The New York Times decided to implement a successful subscription model for their online content that allowed the company to continue to deliver the same type of high-quality journalism and content their readers trusted for over 167 years. They don't rely on ads or clicks so they can make content decisions based on journalism principles instead of the advertiser's demands.

This method appears to be working. According to their January 2017 report, "Last year, The Times brought in almost $500 million in purely digital revenue, which is far more than the digital revenues reported by many other leading publications (including BuzzFeed, The Guardian and The Washington Post) -- combined."

Founded in 1946, Fidelity has come a long way when it comes to digital transformation. While many other companies in the financial industry have struggled to compete with fintech startups, this multinational financial services corporation has been betting big on digital and it shows.

The mobile app, in particular, is one of Fidelity's shining achievements. With a current rating of 4.7 stars and a half a million reviews on Apple, it's safe to say customers are happy with the Fidelity app experience. One of the biggest wins is that this company managed to successfully mimic the desktop trading experience in the app--allowing customers to make trades and invest on the go.

Disney Parks
While Disney is definitely not a princess that needed to be saved, it's important to make note of their impressive digital transformation efforts.

In 2015, Disney Parks announced it would be investing $1 billion in IoT sensors to be used throughout their parks. Today, guests who attend Disney World get a MagicBand wristband that uses RFID technology to make their time in the park seem even more magical. These bands act as payment, hotel room keys, and even ride tickets. And the data Disney collects as their customers use these bands only helps the company find more ways to improve the user experience.

While smaller retailers are dropping like flies, it's only a matter of time before Amazon starts taking out the big name players like Target, Home Depot, Best Buy, or Walmart. The latter, however, decided to take action rather than sit on the sidelines and wait for the inevitable.

Walmart has been squaring up with Amazon by changing its online return policies to make things easier for consumers, offering the lowest prices, and promoting the fact that you don't need a membership to order online (this latest ad hit right when Amazon increased Prime memberships).

But it doesn't stop there. Walmart has also diversified its offerings--buying up online brand names like Jet and Mod Cloth and even selling clothes from Lord & Taylor. In addition, the Walmart mobile app continues to improve the customer experience. The latest update allows customers to add up the costs (including sales tax) on their shopping lists before they even leave the house. Once a customer gets to the store, they can interact with the app's "store assistant" to guide them to items on their list via a map.

The Harvard Business Review sums these efforts up nicely: "Walmart is increasingly becoming a 'digital winner', as it builds out a fast-growing ecommerce business and also leads in digital innovations when compared to other brick-and-mortar retailers."

This is one company that's leaning into digital hard, and giving Amazon a run for their customers' money.

Wrapping up
While each of the above companies uses different strategies when it comes to digital transformation there is one common denominator across the board: a better experience for the customer. The companies that are successful in digital are the ones who put the customer at the center of everything they do. No matter how the technology continues to evolve, the brands that focus on the customer will know the best ways to transform moving forward.
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