Digital disruption is a concept highlighted in Forrester’s recent CIO Summit and UK Summit and is the subject of James L. McQuivey’s book, Digital Disruption.
The key principles behind digital disruption are that it creates new business models, changes value streams, and is faster, more disruption and more pervasive than any earlier change driver we have ever seen. Why? Because it is digital. And Forrester says that for those of you thinking that hunkering down and letting it blow past, like you did for previous trends – FORGET IT. This is not a trend. It is a permanent shift.
Nexus of Forces
Gartner’s nexus of converging forces — social, mobile, cloud and information — is building upon and transforming user behavior while creating new business opportunities. Research over the past several years has identified the independent evolution of four powerful forces: social, mobile, cloud and information. As a result of consumerization and the ubiquity of connected smart devices, people’s behavior has caused a convergence of these forces.” Source: Gartner
Whilst most people recognise these forces at work in their personal and business lives, it is the implications that are either liberating or terrifying. For those business leaders looking to leapfrog their competition or a nimble start-up looking to wrong foot an incumbent it is an exciting time. However, Gartner raised a warning to senior IT leaders: “Existing architectures are becoming obsolete.”
CEOs are scared, very scared
One good thing is that senior executives are aware of the challenge; 71% of global CEOs surveyed in IBM’s 2012 CEO Global Survey said the top external force of change is technology. Forrester CEO George Colony warned delegates at the CIO Summit: “There are many people now who want to disrupt your business. It does not cost much to disrupt business.” Business leaders are becoming more IT-savvy, according to Colony: “The average age of the CEO in the top 100 companies is 59. They went to college before computers. Most of the CEOs did not use computers. “But today, we are seeing CEOs who had Apple II home computers or IBM PCs at school.”
Platforms make this possible
This fundamental issue is that the new platform providers, such as Apple, Amazon EC2, Salesforce.com, are making it way faster and cheaper for new entrants to be disruptors and for them to get new ideas to market. Now it is possible to prototype not just new products and services but new businesses. Get something out and iterate to success, or kill it off quickly. So you current business is going to be challenged by either big players driving out thousands of new ideas or thousands of small new entrants each coming up with a new idea. So the advice, is disrupt yourself before others disrupt you.
But another change is is that the disruptors are now coming up with new customer experiences, not new products. So how do you disrupt your own business? The concept is “adjacent possibilities”. Think about the customer needs adjacent to your current products and services. Rather than pick a 5 year vision for the product. In the new world of constant change you cannot predict that far. No-one can. There are 40 million Kindles and 70 million iPads in existence now. Neither was in existence 2 years ago. So create the minimum to get to market (MVP=minimum viable product), listen intently to your users, and iterate, iterate, iterate.
So what are the implications?
There is plenty of evidence that technology is changing businesses. You only have to look at the print and publishing (newspapers and magazines), music industry (CDs and merchanising) and movies (films and DVD) to see the decimation of their industries. But now, no industry seems to be immune. The events industry as we know it will be under enormous pressure to change so that delegates, sponsors and exhibitors get a better deal. That could mean the death of some of the largest conference and event organizers.
So the action is to start thinking about how your business could and should be disrupted. Those people in your company may be called Product Marketing Specialists, Product Strategists, or Product Management. You will be able to spot them. They are the ones looking very confused and frightened. Because their world is being turned upside down.
They need help and support. So perhaps a copy of Jame’s book would be a great gift. But more importantly, they need to be given permission to think wild thoughts, many of which may come true and be a massive new market.
Digital consumers…. up coming up with new product ideas…. which delivers new experiences.