Digital Disruption is old news. What’s next?
I have a small confession to make, as a part of my holiday reading this summer, I downloaded a copy of Digital Disruption: Unleashing the next wave of disruption, by James McQuivey (Forrester Research) to my Kindle. Not the usual holiday page-turner, I admit.
We often cite Google, Airbnb or Uber as evidence that our most aggressive competitors may come from a completely different sector or from an industry that doesn’t even exist yet.
But before diving in to an analysis of these much discussed digital giants, let’s just pause and consider McQuivey’s story of a twelve year old called Thomas who was able to use free tools from Apple to develop an App, make a little money, and give a TEDx talk to share his experience. Clearly a bright and motivated lad, he was prepared to work for nothing, using whatever tools came to hand.
So it felt like an appropriate choice of reading when Digital Disruption went on to talk about the historical decline of American manufacturers at the hands of competitors from China and other rapidly developing economies, offering the formula of people working for lower salaries (like Thomas) plus the infrastructure that enables them to do so (Like the iPhone Software Development Kit, SDK) to explain the phenomenon.
I first visited China nearly 25 years ago and I was keen to see what had changed and what not. The enormous transformation I saw in all parts of China certainly echo McQuvey’s argument that Digital Disruptors are not innately better, faster or stronger than the rest of us, but that they consistently take small, focused steps that add up to rapid, massive disruption.
The Innovation Trap
A common trap for an organization that makes a conscious decision to sit down and say “Right, today we are going to innovate” is to start from the premise; What do we make? How do we build on what we are already good at? What is the market for this product that we already know how to make? How do we sell this product to customers that we already know? This tried and tested approach looks inside the organization for the resources necessary to innovate, whereas emerging digital challengers seem to have a knack for dreaming up entirely different business models which go viral at the drop of a hat.
OK, I’ve alienated 50% of my readers now, who must now be thinking “We are covered here, we have a robust framework for horizon scanning and idea generation”. But blue sky thinkers can articulate great ideas while lacking the capability to implement them.
So in summary, the book argues that traditional businesses innovate by seeking to do more of what they already do, while disruptors ask themselves “how can we give people something new that they never knew they wanted?”
Behave like a digital disruptor
Incremental innovation is often the task of pragmatic and focused individuals who will reject ideas that won’t connect to today’s customers. They want proof that a thing can be done before they embark on the journey. And this thinking will prevent traditional organizations from behaving like digital disruptors.
To get around this they may seek to employ blue sky thinkers. They are creative, innovative and fun to work with, but their vision for the future often lies too far from something that can be achieved quickly, incrementally and experimentally.
Building on the theme of Thomas and his App, where the rest of us are blocked by intractable problems, lack of resources or unsuitable tools, the digital disruptor will look more widely and see a myriad of free tools which will help them overcome these problems. And they will go further, making their own tools and products free to their customers to further accelerate take up of new ideas.
Of course this approach doesn’t always work, but failure is often the best teacher. Where conventional organizations seek to apportion blame or tighten controls to prevent things going wrong for a second time, disruptors treat failure as useful feedback and use it to streamline and improve their products and services.
The valuables please keep your hands off
25 years ago I travelled through China on a slow train that clattered slowly below vertiginous mountains and across cold deserts to the great cities of the coast.
I enjoyed that leisurely progress so much that I was almost disappointed to find my recent journey to Ping Yao, a beautifully preserved Ming Dynasty city, would take less than 4 hours by bullet train.
The disruption this will cause to the airline industry could be the subject of a whole new blog post, but this ancient city had a few lessons of its own. For example, the scrolls and abacuses in the accounting halls of China’s first remittance bank offered a fascinating insight into how banking worked before the advent of machines.
And next door, in a traditional restaurant, we ordered traditional fare using an iPad that allowed us to scroll through pictures of the menu items and have our order delivered straight to the chef.
OK, Google Translate has a little further to go (“Stir Fried Rotten” anybody?).
But in that restaurant I caught a glimpse of how digital disruption can come to even the most traditional of enterprises.