The speed of innovation and consumer adoption increasingly requires companies to change the tires at 100 mph, yet a report from McKinsey & Company says that only one-third of business transformations—and an even lower percentage of digital transformations—ultimately succeed.
A Wednesday session at the Collision conference in Toronto highlighted three wildly disparate legacy businesses that have successfully incorporated new ways of doing business on the fly.
Betty Liu, executive vice-chair of the New York Stock Exchange (NYSE), said that the 227-year-old organization has undergone a “huge transformation” since being acquired by InterContinentalExchange for US$8.2 billion in 2012.
“Since then, the NYSE has become much leaner [trimming staff from 6,000 to approximately 1,000] and uses AI and blockchain to make the trading system much more efficient,” she said.
One of 13 (soon to be 14) exchanges in the U.S., the NYSE has also successfully “rebirthed” itself as a technology-centric exchange that, she said, is responsible for three-quarters of all U.S. stock proceeds over the past five years. “We’ve not only transformed our technology in-house, but at the same time our link with technology companies is becoming more and more apparent,” said Liu.
The NYSE is acutely aware of the power of brand, with its website touting everything from its opening bell, to its iconic facade (it claims to be one of the most photographed buildings in the world), to the 33 media outlets with access to its trading floor and its 1.5 million Twitter followers as reasons why executives should list their company with the NYSE.
“The stock exchange packs a marketing punch few, if any, businesses can match,” said Quartz in a 2017 article.
Another New York-based legacy brand, Forbes, is using AI and machine learning to transform its business. The more than 100-year-old media brand introduced a new content management system (CMS)—nicknamed “Bertie” after the publication’s founder, Bertie Forbes—that has impacted everything from story ideation to creation and distribution.
“We’re not relying solely on word of mouth or processes or protocols to transfer institutional knowledge from generation to generation,” Forbes’ chief digital officer, Salah Zalatimo told attendees.
Bertie can look at a writer’s prior work and areas of expertise and match it with what’s trending globally to suggest topics worthy of editorial consideration. It can also conduct research and distil it into a synthesized summary for writers. “That’s work that takes hours and days off,” said Zalamito. “It’s made all of our writers more effective at what they do without really having to break stride.”
While such technology fundamentally changes the role of a writer/reporter, Zalamito said that the company has managed to assuage writers’ fears about being replaced by robots. “When you start introducing robots into the factory that is disconcerting,” he said. “[But] it’s not really an artificially enhanced platform; it’s not ever going to be able to do this on its own—it’s really an enhancement.
“It’s more about creating a cyborg, not a robot,” he added. “It’s really augmenting [writers’] intelligence, not creating artificial intelligence. This is an augmented intelligence platform.”
Another legacy brand, Royal Caribbean, is tackling the waves of change that have beset the travel industry. The cruise line introduced a two-story, 20,000 square-foot innovation lab in 2016 as part of its internal commitment to “relentless innovation.”
Jay Schneider, senior vice-president of digital with the Miami-based company, said that the innovation lab enables the company to experiment with updates to everything from its state rooms to restaurants. “It’s a way to help us design what the future looks like with technology in mind,” he said.
All of the panelists highlighted the importance of diversity in becoming a successful 21st Century enterprise.
“Diversity’s a part of what we do,” said Schneider, noting that Royal Caribbean was the first cruise line in the world to introduce a female captain and has set targets for 30% of its workforce to be female centred. “Diversity is part of our DNA and one of the strategic priorities for the company,” he said.
Liu said that diversity is “top-of-mind” for the 2,400 companies listed on the NYSE, and said that senior executives too often claim that a lack of diversity is a pipeline issue. “You hear so much about it being a pipeline issue that there aren’t enough women or minorities to fill senior roles, and that’s just B.S.,” she said. “It’s not a pipeline issue, it’s a network issue. People don’t extend outside their network to find their people.”