Companies have to remain vigilant, flexible and two steps ahead in order to survive. Resting on laurels will only lead to disruption - and eventually, demise. Being hot now is no guarantee of being hot two to three years down the line, especially given the rapid advancement of modern technology.
For example, Uber has disrupted taxi companies across the country, and everyone's talking about them. But self-driving cars from Google could take Uber from disruptor to disrupted within five to 10 years. Like any company that wants to stay on top, Uber will have to keep an eye on this gradual development and adjust its business, technology and offerings accordingly.
If not, Uber could become another Blockbuster. Remember them? The reason for Blockbuster's downfall is simple. The company's leadership made the worst mistake anyone in business can make -- they didn't proactively adapt to change.
Blockbuster never anticipated how consumer preferences might evolve as new technology and conveniences came about, and by the time they attempted to change, it was too little, too late. In the 2000s, Netflix came along and completely disrupted Blockbuster, making it possible for consumers to easily rent and return DVDs online and through the mail, without worrying about late fees. Blockbuster saw things in a vacuum; on the surface, their sales were good and people were still coming into their stores, but this blinded them to the gradual disruption taking place under their noses. By the time Blockbuster did notice, and tried to compete with Netflix by launching their own mail-order DVD service, the writing was on the wall.
Our mortgage-lending company is celebrating its 30th anniversary this year, and our three decades of service to our clients and our community have taught us a lot about how to stay viable over the long term. Here are some tips for Uber and other companies to keep in mind:
Three Tips for Preventing Disruption
1)Don't Just Maintain a Five-Year Outlook... Think 15 Years Down the Line
Companies need to always think about developments that could transform their respective industries and disrupt their businesses over not just the next three to five years, but also the next 10 to 15 years. CEOs, CFOs and other management team members need to ask themselves, "What will a consumer want to do to obtain the service we offer in 2018, 2026, and even 2031? And how do we adapt?"
Another potential disruptor for Uber, further into the future than smart cars, is Elon Musk's proposed Hyperloop high-speed train, which, if completed, would be able to transport passengers at a speed of nearly 800 miles per hour -- making daily work commutes between New York City and Los Angeles incredibly manageable.
If the Hyperloop becomes a reality, and expands across the country, people would be able to easily commute 800 miles or more per day between their homes and workplaces. Since the first rule of real estate is "location, location, location," the Hyperloop could disrupt the value of homes in downtown areas significantly because people wouldn't have to live in or near big cities to work in them. Someone could easily commute to New York City every day from Ohio or Kansas. This scenario wouldn't become a reality in the near future, but it could become a reality in next few decades, and as a result, it's something we (as well as Uber) have to consider.
2)Get Ahead of Industry Changes by Consistently Looking for Ways to Improve
Sharks have to keep moving, or they die. The same is true for companies. Consumers, industries, markets, regulations and technology never stay the same over time--they evolve, and companies have to adapt to these changes in order to survive.
For example, last year, members of the mortgage lending industry were concerned about the impact the TILA-RESPA Integrated Disclosure (TRID) rule, which went into effect on October 3, would have on their business operations. TRID, a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, required significant changes to the origination and closing processes for mortgages, and mortgage lenders had to adapt their technology and operating procedures to ensure they were TRID-compliant.
We successfully adjusted to TRID because we didn't wait until the last minute--our IT, sales, compliance, training and senior leadership teams began collaborating over a year in advance of TRID's implementation to understand how every aspect of the new rule would affect our business, and review all of the changes we would need to make in order to prepare. And we met to discuss the required updates to our technology and our operations at least once a week. Most importantly, we viewed TRID compliance not as a burden, but as another opportunity to help the mortgage brokers in our network do their jobs more efficiently, and help the consumers who rely on our brokers to obtain the best possible mortgage terms.
3)Invest in proprietary technology
Our ongoing investment in proprietary technology also proved useful when preparing for TRID's implementation. Ahead of TRID's start date, our in-house tech development team was able to create proprietary solutions that were not only TRID-compliant, but also made our brokers' work processes more efficient.
This is an example of how in-house technology development can help companies proactively and seamlessly adjust to industry changes, and improve overall operations and client service. While relationships with external technology vendors can be useful, relying on them too much can be detrimental. Company leaders should remember that most vendors are in business to make money today as opposed to 30 years down the line, and as a result, they may not fully understand the intricate nuances of their clients' businesses or industries.
That's why in-house technology development is a valuable long-term investment for companies--no one knows your company and your business better than you and your trusted team members.
Be Netflix, not Blockbuster
By maintaining a long-term outlook, creating proprietary solutions, and taking proactive steps to get ahead of industry developments and changes, Uber and other companies can avoid the fate of Blockbuster --and instead emulate Netflix, which continues to grow and evolve, and now threatens to disrupt TV networks that were around long before Blockbuster.