Doshia Stewart, vice president of global corporate communications at Allegion, and chief marketing officer of Allegion Ventures, uncovers the benefits that come from competitive pressures and how companies of all sizes are adapting to changes.
Digital-first companies are fast, fluid and fundamentally changing the competitive field. Technology that seemed novel two years ago, like augmented reality, voice assistants, robots and smart buildings, are now mainstream. Software-as-a-service, e-commerce platforms and the Internet of Things (IoT) are fueling innovation and new business models at a breakneck speed.
If you’re in a company that’s more than 25 years old, you feel the competitive pressure growing every day: it’s not just peers or low-cost competitors on your flank, but increasingly someone new and outside your industry. Some of the new entrants are start-ups and others are dominant players in another field, and they are likely digital-first companies. These outsiders offer a value proposition very different from yours, born out of a friction point and an important question: “Why does it have to work that way?” By ignoring conventional thinking on how things are done, they found a way to reroute the process and offer a simple and refreshing solution to a common pain point. These inventors may believe the product is the least valuable piece of the ecosystem; often, they find the insights and advice generated from using the product is more important and command a premium for it.
Digital-first companies have a different mindset. They don’t have constraints of legacy systems and precedent but rely heavily on cloud solutions. They move at the speed of light and are not really all that concerned about failure. They’re more focused on learning and adapting than getting it right the first time. They’re confident that they’ll find a path to market and that customers will forgive minor product gaps, provided the company keeps a clear vision and improves quickly.
How do non-traditional competitors help us? First, they create a sense of urgency that keeps us up at night and we worry less about sunk costs than opportunity costs. Second, they make us look outside our industry and see what’s possible. Third, it infuses us with a new obsession about the user experience, and we reject “not invented here” bias. The energy level rises and suddenly there is forward motion on many fronts.
Want a tangible example? Look no further than the grocery aisle. Two years ago, who would have imagined that big box stores and grocery chains would be on the forefront of autonomous delivery services and they would do so in partnership with digital-first innovators? Would they have invested if outside challengers hadn’t created a burning need for tech-driven innovation?
Traditional companies that innovate and partner well may be more valuable than ever. While we may not be as agile as a digital-first company, there’s good reason people trust us. As Allegion’s futurist, Rob Martens, often says: “We’re the adults in the room.” We have a deep understanding of customers, the industry and necessary safeguards. We don’t take shortcuts in cybersecurity or product quality‒even if it slows us down. We can deliver customer service at scale, which is hard for start-ups to manage. And we are in it for the long-term, with the resources to both innovate and deliver.
So, please be obsessed with data, eliminating friction and the customer experience. Become more agile and embrace new technology and innovative partners. And celebrate having competition‒it accelerates innovation and makes our brands better.