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Most businesses could collapse in the next decade

Let’s face facts: the digital world is fundamental to all businesses. Even if you sell offline or operate mainly in the “real world”, the digital world has an impact on your business. Whether it is for communications, such as email, or as a starting point for buyers researching your business, the Internet is central to customers.

The problem is that most businesses themselves use the Internet as a “nice-to-have” and not as central to their business. When I speak to Chief Executives and point out this difference they nod their heads in agreement. But then they say it is “impossible” to change their business to focus on the Internet because it would involve too much change.

Now, though, they are in for a shock. The highly respected consultancy firm Forrester has said that unless businesses make this change they will “face an extinction event” within the next decade.

Graph of Forrester Research

They are saying this because their latest research shows that only 21% of companies have a clear vision for the future use of digital within their business. That’s in spite of 90% of firms agreeing that digital will revolutionise their sector within the next 12 months….! And they are not the only consultants sounding the warning bell – just three months ago Capgemini published their own research suggesting that businesses simply have to make the Internet central to their company, regardless of their sector or industry.

According to Forrester, businesses are now just “bolting on” the Internet to their existing business structures. But what is required, they say, is a complete “re-set” – a fundamental shift in the way businesses are structured and run. Business leaders I meet are totally unprepared to do this because of the seismic shift required. Yet the warning from Forrester is stark: do it or die.

When you look at successful businesses online they are mostly businesses which focus their firm on the Internet – Google, Facebook, Amazon for instance. But it is not just technology-based companies like these online startups which have embraced digital as central to their business. Back in 2012 Starbucks transformed itself into a digital centric company.

Business leaders, used to a non-digital world, find it hard to make the transformation necessary. So, what is the solution? The first step must surely be to conduct an immediate review of the kinds of people setting strategy and plans for your company. The data from Forrester and Capgemini both point to the need to use the services of those “digital natives” in central roles in your company. The future of your business could well depend upon giving the strategic reins to your grandchildren.

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