When it comes for you digital disruption is quick and dramatic. Have a look at these charts:
Each of these charts demonstrate the phenomenon that Seth Godin described well as “gradually, then suddenly”. When the years of steady growth slowed, collapse was imminent.
In a world where organisations seek to deliver consistent revenue and profit growth, the extent of the decline is devastating. Each of these industries was left apologising while there were collapses in confidence, stability, strategy and ultimately dramatic reductions in the capital and other resources available to respond.
Disruption will happen
In Silicon Valley alone multiple billions are invested each quarter in venture capital deals focused on disrupting traditional business economics and business models. Around the world and around the desks of your competitors and potential competitors people are considering how your industry can be rebuilt with digital means.
Disruption is not just an issue for digital media or technology businesses. It reaches the information intensive economics of distribution models, pricing, data exchange and knowledge work. It offers new agility and new ways to rebuild the value chain in other industries. Collaborative consumption is looking at how we buy and use capital intensive items. The internet of things, connecting devices to the internet so that they can exchange data offers even traditional industries new potential. Just look at Google’s acquisition of Nest, a digital connected thermostat, for the extraordinary price of $3.2B, a signal of new opportunities.
Impacts will be widespread across the Australian and global economies. It is just the timing and scale of the impacts that are in issue.
Start Responding Now
Every business should start now to consider the scenarios of what digital disruption might mean for their business, their customers and their industry. Every business should be considering how it can make itself more responsive to the changing digital marketplace.
Here are three steps you can start today:
- Design your future competitor: Ask a team from your business to design the disruptive competitor. Take a group of people from your business (include others from your networks if you need additional perspectives). Give them the challenge of designing a disruptive competitor from the ground up. Let them break the rules. Give them different constraints. Let them imagine product choices, margins, budgets, processes and technology free from your usual practices. Tell them not to come back until they can scare you. This is not daydreaming. Knowing what your future competitor might look like is a good clue to what you need to start doing and where you might need to invest to reduce their advantages.
- Think digital capabilities: There’s a good chance that the team you assigned thought differently about the capabilities that underpin your business. They looked for people with different skills and experiences. They went looking for data to capture, to analyse and to use to create value. They connected customers, suppliers, people and stakeholders in new networks & new channels. They assumed a personalised, streamlined, connected, always on, always aware, algorithm-driven process. They assumed everything that could be digital was digital, everything was mobile, everything was social and almost all of it was free to roam the internet. If that list of capabilities seems fanciful, expensive or impossible, it is exactly where your new digital competitor begins.
- Start becoming a more Responsive Organisation: Let purpose focus your organisation. Let experiments drive your decisions. Let customers drive your product strategy. Let employees drive your creativity. Let community drive your impact on the world. Read more about the Responsive Organisation and begin to experiment in your organisation.
If you are wondering what digital disruption means for your organisation, there’s a good chance someone else is already working on it.
Start working on your future now.