MIT Sloan recently published an article that rounds up the insights Constellation Research founder, principal analyst and chairman R “Ray” Wang imparted at the Innovative Leadership Series to students “looking to take on—and take over—an industry.”
Wang has had a front-row seat to the “digital disruption of the last decade” as he’s helped his big-name clients “navigate digital transformation.” According to Wang, “More than half of Fortune 500 companies lost money last year while more than half of the companies on the list since 2000 are gone—merged, acquired, bankrupt, or off the list.”
Wang suggests that the reason many companies fail has to do with a focus on “operational efficiency.” Fortune 500 companies, Wang argues, should be asking themselves the tough existential questions related to their mission and business model to help them “figure out the products, the services, the insights, the experiences and outcomes.”
The second major piece of advice Wang offered related to the benefits of data. Simply put: “Data leads to information that can be shared with customers for a fee, in an effort to provide a better service. And it doesn’t cost a lot of money to implement.”
Wang pointed to the successes of “matchmakers” like Etsy and TaskRabbit, which reduce friction and distance between customers and service providers, as evidence that the increasingly streamlined connections between consumers and large companies has and will continue to make middlemen obsolete. “Nobody wants a middleman, unless that middleman is adding value.”
Wang cites Amazon’s “unbeatable” all-in-one “content, network, and technology platform” as one he believes companies across all industries will attempt to copy. But the bigger question is how to partner with—or absorb—other organizations to build “the next set of vertically-integrated monopolies.”