March 28, 2017
Digital disruption is a fairly well understood dynamic: new entrant uses technology in new ways to upend existing business models and disrupt markets. In other words, digital disruption is a distinct force with a distinct life span that is mostly external to traditional markets and businesses.
But what if it is more than that? What if it is the canary in the coal mine representing the first signals of a shift in our economy and society? Consider the following:
- 7% of jobs will exit the economy due to automation even if one considers the jobs created specifically by automation. Without the creation of different products or markets (think of the app economy), automation can cause a major shock to developed economies.
- We are already seeing early indications of how high-performing, highly liquid platforms (think Facebook) can extend services and experiences into different industries (e.g. banking and peer-to-peer lending) to blur or pummel traditional industry lines and norms.
- The next step in Uber is self-driving cars which are moving from a cool idea to a reality – and will cause duress or change in automotive, transportation, and insurance markets (let alone public safety norms).
- Artificial intelligence offers up the opportunity to change the health of populations, changing life expectancy, the very nature of diagnostic, surgical, and hospital care, and the economics of health insurance.
We have built a world in which technology advancement operates at lightning speeds – but its impact is not just newer and newer generations of the same thing. Customers are willing to experiment, veering from a linear path to try new services and new ways of doing business. The combined dynamic of hyperadoption and rapid technology advancement unleashes change that is both obvious and unintentional, but nonetheless, profound.
I’ll stop there and make the other observation that these conversations can become full of hype: most of what we talk about is on the fringes of everyday life and most of what we deal with today in leading our respective businesses is shoveling the dirt of the day-to-day.
Unfortunately, the speed of technology outpaces the speed of organizations. Shifting companies to be digital predators (rather than becoming digital prey) takes a long time. As disruption becomes normal, companies don’t have the luxury of time. Those waiting for the burning platform to take decided action will be too late; everyone’s platform is “warm enough” now. And the reality of innovation cycles is that risk is not a one-time phenomenon addressed by a single digital transformation project. Companies need to see this in a more Darwinian sense: that you need to be in a state of hyperevolution where you have the inherent capacity and competency to evolve quickly.
The vast majority of companies will soon compete on the basis of how well they have mastered a digital platform. Attributes of that platform can include elements such as the abilities to:
- Enable the rapid generation of better and new experiences and products to be a first mover, when that makes sense, but a fast-follower all the time.
- Create experiences that are both delivered digitally and trigger an emotional connection.
- Create and participate in ecosystems that can easily adapt to rapidly-changing customer demand and can capitalize on those disruptors that capture consumer imagination.
- Capitalize on internet of things in ways that creates continuous value and customer engagement.
The new technology revolution is interesting but a bit of a red herring (to mix my bird analogies). We are witnessing and participating in a business revolution sparked by technology; a strategy gut check to Boards, CEOs, and leadership teams to move while the storm is pending rather than when the winds shake (and potentially dismantle) the very foundation of your business.