Incumbent firms always struggle with disruptive rivals because they don’t want to cannibalise their existing offerings or they are unable to rethink their existing way of working.
This award is for the organisation that most successfully reinvented itself when faced with a major challenge to its previously-successful business model.
In 2013 US software giant Adobe announced it would scrap its entire business model, replacing its boxed software releases licensed in perpetuity, with an entirely subscription-based cloud suite of products.
With such a massive switch comes significant risk: radical change for the sake of transformational growth is a long game and it often takes years to realise the benefits of overhauling a well-established business model. Some thought Adobe was simply preparing for the future of enterprise software; others said the move would cannibalise the business and shrink the customer base.
And for Adobe, the shift was not simply the revamp of a product line: it was nothing short of a total business-model revolution.
To be successful, it would need company-wide buy-in – every team, department and stakeholder would need to be on board. It was an enormous undertaking. Adobe, and the industry, held its breath.
The transformation saw Adobe’s industry-leading Creative Suite shift from a static, desktop-centric tool into a dynamic, subscription-based product. The move affected every aspect of Adobe’s business – from engineering and operations through to sales, go-to-market and customer service.
In a few short years the high-risk move started to deliver high returns as the transition proved successful beyond all expectations. Adobe’s stock price more than tripled and overall revenue growth climbed from single digits five years ago to 25% in the most recent (Q2 FY19) quarterly financial results.
The higher creative demands of its customers are being met and surpassed, and new features and mobile capabilities are available and ready to use immediately rather than periodically.
Today Adobe is one of the world’s fastest growing software companies, worth over a US$100 billion, and is changing the world through digital experiences. Complete reinvention, wholly mastered.
Follow on Twitter: @Adobe
When Britain’s first online delivery grocer Ocado floated in 2010, the industry gave it little chance of success, with one City analyst declaring: “It begins with an ‘o’, ends with an ‘o’ and is worth zero.” By the summer of 2017, Ocado was the most shorted stock in Europe. Few gave the online supermarket a prayer, believing it was only a matter of time before it fell victim to Amazon’s move into online food delivery and its massive distribution capabilities.
But the naysayers reckoned without the self-belief of CEO and co-founder Tim Steiner. For years, Steiner had argued that Ocado was not merely “a van outfit”, but in fact owned the most sophisticated online grocery-delivery technology around, boasting state-of-the-art robotic tech and the ability to process food orders ultra-efficiently in its highly automated warehouses.
A 2018 deal with US retail giant Kroger confirmed that belief, sending Ocado’s share price soaring by 80%, with another deal this year with UK bricks-and-mortar grocery giant M&S boosting stock further. More international deals followed as grocery retailers across the globe realised Ocado’s technology would allow them to leapfrog the competition and finally do online grocery scalably, sustainably and profitably. Suddenly, Ocado was not just an online retailer, but a tech dynamo that could help all supermarkets repel the existential threat posed by Amazon.
The radical transformation has seen Ocado’s share price skyrocket and market capitalisation soar to £8.5 billion which, with its services in demand globally, propelled it onto the FTSE 100 for the first time in its history – a complete reinvention from “zero” to industry hero.
Follow on Twitter: @Ocado
Founded in 2010 by former memory grandmaster Ed Cooke, Ben Whately and Greg Detre, Memrise began life as a website for learning any fact-based topic, underpinned by a science-based learning methodology, with users able to create their own courses. The business grew organically for a few years, but around 2015 the founders started to detect significant shifts in customer behaviour. Spotting a big opportunity, they decided to focus instead on a new territory: developing a learning system to learn foreign language fast and efficiently. It was a brave call – the online learning space is ultra-competitive – but Cooke and Whately were convinced that the incumbents fundamentally didn’t understand how people learn languages – which meant they weren’t doing it effectively.
They also decided to create their own content, rather than relying on the Memrise community to create language courses: their second reinvention. The third reinvention concerned the platform. The team realised that most of their users were using mobile devices, so they took the plunge, cut web development and focused completely on the mobile experience. And in 2015 the company ran a successful kickstarter campaign that led to the creation of their own real-life content and the world’s first ‘video dictionary’; since then they have continued to develop a video-clip learning feature that further sets them apart from their competitors.
Today Memrise has over 40 million users around the world. On their path to product excellence, the founders had the courage not merely to reinvent the product multiple times, but to cannibalise it completely. Today the only ones eating their words are the doubters.
Follow on Twitter: @memrise
About 10 years ago, Research in Motion’s BlackBerry smartphones, underpinned by leading technology and the best writing/typing system at the time, were so successful that even Google’s smartphone prototypes were “inspired” by them. In fact, the smartphones were so successful that Research in Motion changed its name to BlackBerry in 2013. But, by then, other touch-screen smartphones such as Apple and Android had come to dominate the market through more sophisticated product lines, superior marketing strategies and revenue models, and high street and online stores. BlackBerry had failed to keep up with the competition and its share price fell from a $140-high in 2008 to $7 in 2012. Today it sells less than one million smartphones annually.
But, just when everybody expected the company to disappear completely, it refocused on data science and software engineering (it had, after all, begun life as a data technology developer). Benefiting from its still-powerful brand name, it built a market-leading cyber security, technology solutions and hardware licensing firm through in-house development and shrewd major acquisitions. Its reincarnation as a software and services company (it now has more than 40,000 patents, many geared towards hot areas such as secure communications and IoT) has seen its market cap recover from its lows, with record revenue from software and services in fiscal year 2019 of $1.7 billion. The shift from B2C smartphones to B2B technology has proven a master switch; one that makes BlackBerry a true master of reinvention.
Follow on Twitter: @BBMobile
Estonia is a small Baltic nation with a population of only 1.3 million and a land mass of just 4 million hectares; more than half of the country is forest. Under Soviet Union occupation Estonia suffered massive environmental damage, falling living standards, heavy militarisation and a complete stifling of civil society. On gaining independence in 1991, Estonia had no choice but to innovate to survive.
And how it has innovated. Taking its cue from the private sector – Skype, for example, was created by Estonian software engineers in 2003 – the government has quickly taken its citizens digital. While only half of the country had a telephone line in 1991, by 1997 97% of schools were online; a free government WiFi network covering urban areas was in place by 2002; and e-voting was introduced in 2005. But that was just the beginning…
The government has since issued every Estonian a digital identity, giving citizens online access to public services, such as health and education services, and the ability to interface with commercial organisations; for example, to access financial services (online-banking). And in 2015 Estonia became the first country to offer e-residency, allowing foreign nationals to become residents online without even needing to visit the country in person. The vision is to attract investors, entrepreneurs, students and others in order to encourage them to contribute to the Estonian digital economy.
In short, Estonia has completely reinvented itself as a groundbreaking global innovator. There are start-up companies – and then, it seems, there are start-up countries.
Follow on Twitter: @e_estonia