Staying Ahead of Startup Disruption

Despite persistent digital disruption from competing startups and an evolution in consumers' digital preferences, many large, traditional corporations have yet to leverage the potential impact of digital on their own operating models. Digital disruption is a more evolutionary than revolutionary process, offering leadership the opportunity to recognize its impact and act before it’s too late. 

The commercial pathway between products and customers has constantly progressed over the past decade or so. The way companies identify, engage, service and retain customers has changed profoundly due to digital evolution. 

The digital evolution has cemented the fact that no brand is safe from disruption. As technology startups continue to challenge established brands and methods, it is imperative that companies re-examine their traditional practices and foster their own disruption.

Even New York City’s iconic Yellow Medallion taxicab system faces an ongoing, game-changing challenge from startups, such as Uber and Lyft. The immediacy of this challenge is amplified by the fact that Uber is unrestricted by ingrained practices. Whether traditionalists can resist change is a matter of speculation; however history tells us to never bet on the status quo.



Several well-established companies have recognized the vulnerability of their brands due to the speed of change precipitated by digital evolution. Their willingness to self-diagnose has helped them avoid new pitfalls and adopt the strategies that enable startups to have quick and transformative impact. 

Since innovativeness is not easily or quickly cultivated, many companies use investment and acquisition to change their corporate DNA. According toDow Jones Venture Source, corporate venture capital spend increased by 45% to over $5 billion in the first half of 2014 when compared to the first half of 2013. In addition to investing in technology startups, traditional corporate America is looking to supplement traditional practices with their own digital innovation. While the painful lessons of the print newspaper or music industries may seem cliché, they are relevant to everyone and are ignored with great peril.

The following companies have demonstrated their ability to innovate and disrupt, and in doing so, preserve their brand relevance with audiences:

Viacom/MTV’s Social Gamification

Earlier this year, MTV UK partnered with Spredfast, a social marketing platform for enterprise, to launch a digital marketing campaign that hosted the largest-ever online vote. The campaign leveraged gamification to encourage broadcast and digital audiences to vote for their favorite musical artists of the summer. This campaign yielded 166,000,000 tweets and a 22% increase in broadcast viewership.

L’Oreal’s Virtual Reality App ‘Makeup Genius’

L’Oreal’s innovation team recently released a new app, entitled “Makeup Genius.” The new app for mobile phones and tablets acts as a virtual mirror that allows users to virtually apply and test L’Oreal beauty products. “Makeup Genius” is evidence that L’Oreal is establishing a sophisticated and ongoing relationship with its customers, in a manner far more dynamic than the traditional chat across the counter.

McDonald’s Mobile Payments

A global brand constantly engaged in digital innovation, McDonald’s frequently leverages technology in order to adapt to the needs and expectations of today’s consumers. Recently, McDonalds began testing mobile payments in select markets, allowing customers to quickly make purchases from their mobile phone prior to in-store or drive-through pick-up. Through technological innovation, McDonald’s is making food fast, not fast food.

Getty Images Mobile App “Moments”

Getty Images, one of the world’s largest creators and providers of photography, video, and digital content, must stay ahead of the next generation of competitor, citizen photographers capturing powerful images on their smartphones. This year, Getty Images released an iPhone app that notified image contributors via their smartphone of new image requests and allows contributors to quickly submit requested photography. Through “Moments,” Getty is harnessing the benefits of citizen photo-journalism while remaining relevant to its traditional customers.

These examples are integral to the customer engagement evolution. Business managers must find new and better ways to present products and services that enhance the consumer experience. Innovation cannot be dominated by 20-somethings in a garage or incubator. Corporate America must see the virtues of disruption. Without disruption, today’s cash cow will quickly become tomorrow’s dinosaur.

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