The Preventable Death Of The Swiss Watch Industry

By Michael Gale and Chris Aarons

 84% of digital transformations fail. While there are a lot of reasons for this, as we have laid out, most are not only preventable, but are sitting right in front of you. If you think this is overblown, take the example of extraordinary growth for Apple as both a cautionary and an uplifting tale of what could be.

The Apple watch business is now larger than the whole Swiss watch business. As of Q4 2017, two million more people bought Apple watches than the total number of all the Swiss watches in that quarter. This is something we saw coming years ago and we included it in the book, The Digital Helix: Transforming Your Organization's DNA to Thrive in the Digital Age (page 43). In fact, chapter three of the book is entitled, “Seven Drivers That Will Help You Escape the Old World”. To be clear, we are not watch executives or involved with the watch industry. But some of these changes are obvious as very bright and well-intentioned leaders push forward without using digital signals to guide their transformation.

If you are looking to thrive with your transformation and worried about this possibly happening to your organization, here are four keys to keep you moving in the right direction and ahead of the curve, regardless of the industry you’re in.

1.    New Ways to Pay Attention Matter – Trends, Blips and Early Signs. On the surface, this might sound obvious and something you have been doing for years. But remember, while Apple is enormous and seemingly has the power to create markets at will, trends and signals point to where the market and consumers are going. The Swiss watch makers not only missed the move to smartwatches, they missed the signals showing what people really wanted in a wearable device. Yes, there have been numerous other attempts at smartwatches, including Microsoft, Pebble and others. But none of these had the power to do what Apple did in this market. This is precisely why the Swiss should have been working to own the next iteration of the watch or wearable to beat anyone who would try to take share away, instead of just creating designs. In fact, this is the second time the Swiss missed a key trend as they gave away Quartz and digital watch technology to Seiko in the 1960s. Of all industries, they should have been far more vigilant about staying ahead of their market and customers.

But what should have the Swiss and others done? Again, going back to the book, we discussed this very possibility more than two and half years ago and provided a simple visual on trend watching (below). Everybody should be paying attention to watching and exploring trends in the digital world to see, hear, discuss and sense the possibilities before competitors or others outside of your market do.

Here is the chart from The Digital Helix book (page 44). Take any subject you want and get with some colleagues for 90 minutes and test any and all ideas or trends against this simple matrix.

2. Customers are Like Liquid or Jelly; They Change Shape In the Environment of the Moment. Think about some of the market upheavals that have hit all of us in the last few years. Now you can:

• Get food and almost anything else delivered in under an hour, changing the entire concept of shopping
• Book a stay in a stranger’s house almost anywhere in the world with the ease and convenience of booking a hotel room, changing the entire concept of lodging.  
• Get a ride in minutes faster, easier and cheaper than a cab, changing the concept of transportation.
• Hire a specialist or highly skilled workers to handle an intricate task with just a few clicks, changing the nature of employees and talent.  

Now almost everything is possible or easier for customers and consumers. The notions and precepts taught in MBA schools just a few years ago as a way to solve most challenges and build markets are being turned on their head. Consumers are the sum of their experiences and actively build a portfolio of experiences to identify how, what and where for anything they want.  This incredible intensity and trust in moments has enabled new leaders to identify what matters to consumers and be far more flexible in developing solutions to these new needs. Plus, once a change happens in one corner or market, you can see many others happening in other industries as these innovations ripple across and become the norm for the experiences people expect.  

Three questions to ask to avoid the Appleization or takeover of your market from the outside:

1. Do our customers think and act differently about the experience with our brand because they are being digitally transformed? For example, if you are a taxi company, are you held to different standards now because of the idea of UBER?
2. Does a change in thinking open up vulnerabilities for us or windows of new opportunity in other segments or even markets? For example, should Home Depot think about its website being more like Amazon or more like Lowes?
3. Where can we invest in experimentation to reveal or play with choices in this changing world? 

3. In Digital Transformation Anything Is Possible, If You Get The 7 Digital Helix DNA Markers Working For You. We published a piece showing you the seven digital DNA markers from the book. There is too much here to discuss (it’s the heart of the book). but print out the inside cover of the book and invest a few minutes every day to see where you are.

4. Hubris Precedes Humility. In other words, pride comes before the fall. We all get very comfortable functioning in daily, weekly and annual patterns. But in a digitally transforming world where change is occurring so rapidly, patterns make your markets ripe for takeover from the outside. Mindsets need to evolve to handle the speed, complexity and fluid nature of what will drive long term success in your sector. To give you a better idea of the type of mindset required, read this chapter from The Digital Helix book. In it you will see interviews with Coach Pete Carroll of the Seattle Seahawks, Dr. Michael Gervais, a leading sports psychologist and Michael Schrage of MIT discussing how your thinking needs to evolve to handle and thrive in a changing market and world. As you read it, ask yourself two questions:

1. Are we investing in skill set development around high performing mindsets for a digitally transforming world?
2. How prepared are we to invest in getting uncomfortable and curious with our customer conversations (where we fail, where might they be going)?

Don’t pretend this can’t happen to you. The world of business is littered with leaders being toppled by organizations that saw and created a better mousetrap. In the Digital Age, almost anyone can create not only a better product, but a better solution for a customer problem you didn’t even know you had. In many cases, this new “thing” is able to make not only the leaders’ product irrelevant, but also the leaders’ entire business and market irrelevant. That’s why our research shows that 55% of digital leaders are scared of startups. These new players are fully digital from inception, use pay-as-you-go resources to scale rapidly and are usually sole created to fix the problem your customers have. The only option leaders have is to beat them at this game by creating the next revolution in their own market before anyone else does.

The Digital Helix book has a full set of assessment tools and frameworks used by leading digitally transforming organizations to navigate through changing customers, markets and experiences. Using these connected sets of assets, you will be able to avoid the internal echo chamber that keeps organizations locked into simple evolutionary thinking and delivery that prevents them from seeing huge shifts in the market and customer needs.