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Why Upstart Companies Win Over Bigger Established Players

This magazine is the product of our years spent turning around or assisting companies to achieve higher growth.

Recently, we’ve been putting our experience running digital first companies to use helping more traditional companies to make the changes needed to compete with newer digital first companies.

The biggest advantage upstart companies have

Why do upstart companies sometimes so easily displace long established competitors on the customer experience playing field?  It’s a bit counter intuitive — the legacy players have long standing customer relationships, deep supplier connections and bigger pockets (most of the time).

 Two words: integrated systems

Built from the ground up on combined and connected production and service systems, newer entrants have the clear advantage on the infrastructure side.  It’s one of the pillars of a strong customer experience strategy.  Even if legacy players add mobile or omnichannel capabilities and they are highly committed to innovating around CX, they still suffer at the hands of the newer competitors.

Alignment, efficiency, accountability

 We’ve found that making the transition is most difficult around aligning the non-customer facing teams and processes.  They’re not used to be under the spotlight of customer feedback and satisfaction.

Even if a company succeeds in putting in place integrated systems, the transition for the ‘back office / production’ side of the business is a difficult one.  They’re simply not used to being accountable to the customer.  

The problem lies in competitive advantage.  When a retailer faces Amazon, which knows end to end where the failure points are in the customer experience, then its forced to create the same structure.   That’s when the walls go up and the transition comes to a grinding halt.

“We’ve always done it that way”

Perhaps the line I hate to hear the most from team members, especially when I first started out turning around lagging businesses. Now I’ve come to embrace it as the first challenge in achieving a turnaround.  Along with new systems, building team buy-in at the non-customer facing level is a challenge which we relish — because the payoff for a business is tremendous (even if there are some casualties among the old-school diehards).  

Sep 3, 2015  
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