When talking to various industry leaders and executives, we usually find ourselves talking about specific industry trends of that specific enterprise and how it might impact their business. Whilst this is great; I feel that we might end up missing two critical areas:
- First as there is a great need to discuss about existing and emerging competitors which are challenging the business model of incumbents, there is an even a bigger need to talk about the opportunities presented by these changes happening due to new technologies.
- Moreover and more importantly than the previous one in my view, we are still working with an assumption that the boundaries of industries still exist like they existed in the old economy. Yes we had strong boundaries between industries in the old economy but with digital revolution and innovation, those boundaries are just at organizational and mental level rather than economic or social level.
Let me give some simple examples: When you drive a BMW, you easily notice that iDrive system was inspired by the video game industry, to operate a relatively complex navigation in a simple way. Or doesn’t the Drive Thru concept of McDonald’s remind you a Formula 1 pit stop? To take it more, think about Walmart Health. The idea behind the Walmart Health is offering an affordable alternative for those who need routine medical care. Retail and Healthcare together. Or think about Toyota’s Woven City considering all trends like urbanization, environmentalism, ageing society, robotics, sustainable energy, autonomy, 5G connectivity etc mainly not from automotive industry.
What these various examples show us is very clear. We should not be looking only on the eroding boundaries between industries dominant business models, but there might various connection and similarities between products, services, processes, strategies, culture and leadership which might be the main source of innovation. Digitization brings us entirely new economic ecosystems that will create redistribution of market share. And new profit polls will emerge at the boundaries between traditional industries. Industry boundaries are being redrawn, old strengths suddenly count for less and unexpected symbiotic alliances are being formed.
Cross Industry pollination is happening everywhere and becoming a strong driver of innovation. Hence if we limit our thinking to the industry we are in and/or to our existing competitors only, we might be ending up missing a big opportunity to provide better solutions & services to our customers. To spark our thinking, let me put some cross-industry pollination examples:
- Tesla investing in solar and battery technology and building an ecosystem. Is Tesla an automotive manufacturer, software house or becoming ecosystem of electric manufacturing/storage/distribution(charging)
- Cybersecurity meeting autonomous driving: The impact of loss of data vs loss of control when driving
- Digital Retail and Data Science: Amazon generating more than a third of its revenue thru recommendations
- Fintechs vs Retail: Fintechs are targeting retail banking. Main trends in retail- empowered consumer, always connected consumer, personalization of offering- are exactly applicable to Banks
- Healthcare: Predictive maintenance in factory floor, might it become the future of Digital Healthcare
- Omnichannel: Can we assume at omnichannel is just for retail? Or for all industries?
- Healthcare and Insurance: Cost redistribution between patient, healthcare provider and insurance company when data shared across parties. Which industry becoming which? Are they going to merge?
- Who will become the intermediaries? Consumers shopping directly thru manufacturers ( Wish.com) making retailer obsolete, or price comparison sites in Travel industry becoming the norm of consumer shopping
- In Level 5 autonomous driving, what will be the main differentiator of a car? Entertainment system? Software?
- Will traditional banks be service provider and data companies? Are traditional, classical banking system be able to provide customer life style solutions to customers?
- Cloud provider having healthcare clouds, phone vendors providing platforms for medical research.
- Urbanization and Telco: What kind of services Telco’s will provide in Smart Cities?
The list can go on and on. It is not intended to be comprehensive or complete. Just sharing some thought how lines are already blurred. As we look into trends, it is very clear that we need look beyond boundaries. That is where pollination and innovation is happening and that is where new opportunities will rise.