- When it comes to changing business and society, incumbent businesses and digital upstarts can learn from one another.
- China's Tencent, an internet service portal founded in 1998, took a cue from digital startups – and founded the game-changing app WeChat.
- Businesses of all kinds should not be afraid to think big – while also keeping in mind old-fashioned business discipline.
Throughout history, we have turned to technology to solve our biggest problems. From making knowledge more accessible to more people and bringing more connectedness, to making travel safer, our planet cleaner and even saving lives, technology has made it all possible. And the big benefits of bringing these big changes have traditionally gone to the enterprises with access to these technologies.
Today, not only is the potential of technology to bring in greater and faster change infinitely heightened, the barrier to technology is also at its lowest ever.
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Predictably, digital upstarts are beginning to leverage the same technologies as the big category leaders. They’re applying technology through resourceful new business models that focus intently on customers, which has captured popular imagination. However, this growing perception that the new generation of digital natives is somehow uniquely equipped to unsettle the old guard is misplaced. Sure, tech giants like Amazon, Google, and Facebook continue to grow impressively. But for more than 40% of the unicorns that went public since 2011, valuation stays flat – or worse, has dropped.
So, what’s the secret that might enable a company – especially incumbents – to leverage digital technologies inventively yet sustainably to make a tangible difference to business and society?
The answer lies in three key factors: Mindset, Scale and Discipline.
Mindset: Embrace Creative Destruction
Most companies are really good at dealing with crisis situations, rapidly rounding up resources and acting promptly and resolutely in response. But these same companies struggle to deal with the slow, quiet rise of an uncertain risk that does not necessarily announce itself, like emerging disruption. This requires companies to relook at their portfolio of products and services with a mindset that accepts deep-rooted change, not excluding creative destruction. One great example is Microsoft changing its thinking about Windows as its core product. This pushed the company to build Azure, its cloud computing service, which now accounts for over $34 billion in annual revenue.
Sometimes, this path could lead companies to destroy current revenue streams to make way for new ones, rather than let a hungry start-up do that instead. China’s Tencent, founded in 1998 and grown into the country’s largest and most-used Internet service portal, clearly embraces this perspective. The company dominated online instant messaging with their QQ service for desktops. With the rise of the smartphone, the company’s leadership lost no time instituting new teams to imagine and bring to life a different social media platform, which they knew only too well would cannibalize the existing QQ service. From that bold decision, WeChat was born.
Scale: Think Big, Think Billions
It takes the same effort to think big or think small, so we might as well think big. Besides, if a company really wants to move the needle at population-scale, make an impact and actually change the lives of people, there is no option but to think at scale. This is not an act of charity but an act of strategy – because winner-take-all marketplaces respond to solutions at scale with increasing returns to scale. And technology can be a reliable ally here.
My own experience reaffirms this idea – from building Aadhaar, India’s unique digital identity system, to laying the foundation for the launch of the Unified Payment Interface (UPI), an initiative of the National Payments Corporation of India (NPCI), to more recently, launching Account Aggregator, a Reserve Bank of India initiative allowing companies to act as aggregators and provide data empowerment to consumers. These initiatives have affected over a billion people across the country – and I’ve seen impact that’s profound. More than 1.23 billion Aadhaar IDs have been issued since launch of the program in 2010, with 647 million Aadhar-linked bank accounts. Over 100 million people withdrew money through the Aadhaar-enabled payment system, which is designed and rolled out by NPCI to allow those who don’t own a phone to open a bank account using their Aadhar e-KYC and draw money in their village just by using their fingerprint. UPI did 1.2 billion transactions in the month of November 2019.
Discipline: Old-Fashioned Business Building
If you look at companies that have thrived over the long term, the same fundamentals enable these organizations to endure and thrive. Beyond the first flush of success, the first run in the market, those first levers of technology and even the founding generation of leadership, they sustain the hunger of their early days by focusing on core values, strong governance, profits and sustained cash flow. This old-fashioned business discipline is the secret of their longevity.
What is the World Economic Forum doing about ensuring access to the internet for all?
In 2018, internet connectivity finally reached over half the world’s population. Yet some 3.4 billion people – about 50% of the world’s population – are still not online.
Although much progress has been made in closing this digital divide, the challenge remains overwhelming, complex and multidimensional. It requires a collaborative, multistakeholder approach to overcome four key barriers to internet inclusion: infrastructure; affordability; skills, awareness and cultural acceptance; and relevant content.
The World Economic Forum launched Internet for All in 2016 to provide a platform where leaders from government, private-sector, international organizations, non-profit organizations, academia and civil society could come together and develop models of public-private collaboration for internet inclusion globally.
Since its launch, Internet for All has achieved significant on-the-ground results globally - including launching four operational country programmes in Rwanda, South Africa, Argentina and Jordan.
Read more about our results, and ongoing efforts to ensure access to the internet for all in our impact story.
Contact us to partner with the Forum and shape the future of our digital economy.
By adhering to this three-pronged approach, we can give new lease of life to a generation of companies with both the tenacity and the flexibility to leverage digital technologies in a way that truly moves us all forward.