Here are four ways to address a new market reality and avoid being eaten by the new business species. It is a matter of mastering de-risking.

To what extent do you expect your industry to be disrupted within the next three years – and by what?

This question was posed by Accenture to the 3,600 biggest companies in the world. The answers were a clear indication of the unprecedented corporate turbulence that we face in the coming 1,000 days. More than half of the companies expect large or very large disruptions driven by new technology, new competitors, new regulation (e.g. environmental issues), social and cultural shifts, or demographic shifts. New technology tops the list, with 68% of companies identifying it as the number one disruptor. 63% of companies are already experiencing disruption, but 43% feel “highly susceptible to future disruption”.

(Source: Disruption Need Not Be an Enigma, Accenture, 2018)

This survey is very much aligned with other reports conveying the same message: the biggest invention any company needs in the next 1,000 days is to reinvent itself. If not, it might be swallowed, outperformed, or eaten by an “Amazon” – a company which challenges everything that business-as-usual stands for and simply revolutionizes how to do business. Amazon is not only disrupting the retail sector and any other sector they believe can be turned into new bizz, they are disrupting traditional business models.

The biggest invention any company needs in the next 1,000 days is to reinvent itself.

That is the reason why the old and mighty retail giant Walmart has been outperformed by Amazon. Walmart’s yearly growth rate is 3.5% per year, while Amazon’s is 31%, with its market value three times larger than Walmart’s.

The New Species

“The Amazons” are just an example of a new business species. Others could be called “Teslas”, “Googles”, “Apples”, and “Airbnbs”. If you don’t understand their way of doing business, you might end up in the statistics of extinct species like “Kodaks” – companies who had all the opportunities, but turned them into risks because they were too blinded by their own success to transform in time. The stories of the “Kodaks” can be followed on the various global rankings of the world’s biggest companies. In 2015 and 2016, 44 companies – almost 10% – fell out of the Fortune 500. That trend will accelerate. According to forecasts, 75% of the 500 leading companies on Standard & Poor’s global list will be out of business within the next 10 years. It will be survival of the fittest and the fastest.

The challenge has been named “Big Bang Disruption” – combining the impact of new digital technology and outside pressure from accelerating global risks like climate change. It will be survival of the fittest and the fastest. But to stay fit and fast is not dependent on the sector, size and age of a company, but the corporate mindset – how to read and address the new rules of the market game. Week by week, The Sustanian will analyse what that implies – what and who to watch out for, keeping our readers updated on the latest important trends and events.


Four Rules of the Market Game

A golden rule in the new game will be de-risking the future. It represents a mindset that constantly focuses on how to minimize risks and maximize opportunities. Here are four ways to address de-risking.

#1 — Know that Success Can Kill You

Transform your company when you don’t need to. It takes several years and huge resources to reinvent a company. Too often the process is done under growing pressure like in Walmart’s case. It then ends up becoming more of a rescue operation than a well-planned turn around. So the difference between a risk and an opportunity is how soon you discover it. The history of business is filled with fascinating cases of the rise and fall of big companies. Most of them were killed by their success. It blinded them and they underestimated the speed and power of new players. That also goes for the whole media industry, and in the years to come for companies who either don’t adjust fast enough to a new digital reality or a new sustainable reality – depending on what business you are in. The message is clear: Kill your core or the core kills you.

#2 — Turn Risks into Virtues

Start loving your risks. This is what de-risk is all about – turning risk management into opportunity management. As described in the article “Get Access to the New Trillion Dollar Market”, Sustainia has documented how the 17 Global Goals can open up 55 new markets and hundreds of solutions. We have to change our perception of risk – a risk is just another way of identifying a new solution, a new market, a new venture. Change your mindset, change your potential.

#3 — Remap Your Landscape

Leave your sector and expand your market scope. Which sector does Amazon represent? None and every one. Don’t define yourself by your product, but by the needs you are fulfilling. The Danish toy company LEGO is not in the market for construction toys, but for kids’ time – for stimulating kids’ imagination and creativity. Needs don’t respect and follow given sectors, they appear on the edges of different sectors and create new converging markets. None of the global goals can be solved by one sector alone. It takes new partners, new cross-sector relations. Your competitive edge is decided by your ability to update your reality, to prepare for the unexpected, and identify markets and opportunities that you never thought about 1,000 days ago.

#4 — Start an Internal Revolution

Don’t forget the change-makers at the bottom of the pyramid. The speed of transforming your company depends on how fast you can change the corporate culture.

Changing a corporate direction is much more than a management exercise. It’s a mindset revolution and has to be rooted from top to bottom.

That is a big challenge when fast change is key. Top executives might join global conferences and high-level networks, creating great visions for the company, but how do those visions resonate throughout the whole company – among the real change-makers at all organizational levels? Changing a corporate direction is much more than a management exercise. It’s a mindset revolution and has to be rooted from top to bottom. This is not just about de-risking. It is about leadership – the leadership which will be needed in the 1,000 days to come.

Erik Rasmussen is founder and Executive Chairman of Sustainia. From 1989 to December 2016 Erik held the position as founder and CEO of the house of innovation, Monday Morning. Erik has been elected one of the world’s 100 most influential journalists by World Economic Forum, has been a member of the International Media Council, and was recently awarded the prestigious Danish Publishing Prize for his influence on a generation of Danish journalists.