Soccer team in a huddle

Digital Disruption Without Destruction

March 7, 2016 by Natalie Fine 245

Lessons from Netflix and others: How to adopt new digital business models and survive the transition.

Think back for a moment to 2011, when Netflix decided to make a major shift. To firmly establish its growing commitment to streaming video, the company tried to spin off its DVD-by-mail only business into a separate company while hiking prices for the streaming business by 60%. Customers responded with howls of outrage, Gigaom reported at the time.

Placing the priority on streaming wasn’t the problem. The issue was in Netflix shifting its business model too abruptly. Instead of easing customers away from DVDs gradually, Netflix brought a massive and unexpected change upon them – with cataclysmic effects. CNNMoney reported that roughly 800,000 customers cancelled their accounts between July and October 2011, and the company’s market capitalization plummeted 75%.

Cisco CEO John Chambers predicts that 40% of global companies will be crushed under the pressure to undergo digital transformation. Netflix could have easily become one of them. Instead, it bounced back and has grown its customer base by nearly 125% since that initial decision to focus on streaming. What lessons can be learned from Netflix?

IoT-Infographic_Digitalist-Q116

How Quickly Are Industries Adopting IoT? Click for full infographic.

How Do You Remake Your Company Without Destroying It in the Process?

This critical question is the focus of When to Cook The Golden Goose, the cover story in the Q1 issue of Digitalist Magazine, Executive Quarterly. With examples from a range of companies, partners and SAP Customers – including Under Armour, Burberry, Amazon and Daimler’s car2go – the piece, written by Merijn Helle SAP VP, Retail & Fashion, examines how digital disruption is both a threat and an opportunity.

Digital transformation involves a lot of change, Helle writes, not just in how you interact with customers, but also in how you function internally. He provides five survival tips from a number of experts in innovation as a guide to navigate the digital storms.

The new issue of Digitalist Magazine, Executive Quarterly, is now available on the Apple App Store and Google Play. Published by SAP, this mobile-native magazine filters through the noise, with articles about under-the-radar trends, profiles of disruptive companies and technologies, and interviews with leading thinkers who are shaping the future of tech and business. For executives who are redefining their organizations for the digital economy, Digitalist Magazine, Executive Quarterly, offers compelling ideas and insights for leading the transformation.

Highlights from the Q1 Issue:
To learn more, download the app,  available for smartphones and tablets from the Apple App Store and Google Play, and share feedback using the @digitalistmag handle and #Digitalist to tell others what you think.

Top image via Shutterstock

Tags: , , , ,

Leave a Reply