“Digital disruption” is one of the most frequently discussed elements of enterprise strategy among today’s business leaders. This term embodies the fact that emerging technology clusters like AI/Machine Learning, Cloud Computing, and Big Data aren’t just driving marginal efficiency improvements. While these technologies do offer transformative efficiencies within the contours of today’s operational models, they also create the possibility for new business models entirely.
The sheer volume of discussion around “digital disruption” risks creating the false impression that this term is an empty buzzword. Indeed, simply paying to license high-tech tools won’t cause much disruption at all.
But digital disruption is far from a myth—the key is cutting through an exclusive focus on technological hype and finding a disciplined focus on the strategies and practices driving very real digital disruptions in industries throughout the globe.
That’s because the most transformative changes capable of being driven by these technology clusters are accessible only when these innovative tools are tightly integrated to real, ground-level business problems.
This blog lays out some fundamental principles for fostering a concept of disruption that’s more than hype. Disruption is something deeper than innovation and something more dramatic than transformation. Disruption occurs at that pivotal moment when innovation and transformation reach discrete inflection points that change the very contours of competition in an industry.
Digital Disruption as a Business Challenge, Not a Technology Problem
Rather than a series of technological problems to be solved with ever-advancing tech, we want to conceive of disruption as a market force that creates opportunities in equal volume to the management challenges it imposes.
Successful firms in today’s fiercely completive global marketplace aren’t just those employing the shiniest new tech, but those successfully leveraging technology to pursue opportunities that simply weren’t there before in their industry.
Disruption isn’t simply change. It’s a much more deep-seated shift in the competitive landscape of a sector or industry.
Disruption as a Competition Enabler
Some of the most respected companies in the world, names like Amazon and Google, have been among the most aggressive about using technology to shake up existing markets—from advertising, to retail, to mobile computing.
The globe-spanning ambition of the tech giants can create a sense of mythic invulnerability around “disruption”—that it’s solely the domain of giants with billions to burn. But that couldn’t be further from the truth. These companies often are the “first adopters” of new tech, but it’s often smaller firms left to collect the revenue left available by clumsy legacy players in disrupted industries.
Firms need to keep a careful eye on the second-order effects of disruptions being caused by larger players in their field. These changes create opportunities that are rarely entirely captured by the first disruptor.
In this sense, disruption is a competition enabler. And more competition is ultimately good for smaller firms hungry for growth.
Operational Disruption: Beyond Consumer-Facing Innovation
Technological disruption, perhaps because it contains the allure of innovation and a glimpse into the future, gets a unique amount of media attention relative to other enterprise dynamics. Media attention is heaped upon the latest technologies perceived as likely to change the ways consumers interact with businesses.
We never want to forget, however, that the most profound innovations don’t have to be consumer-facing.
In fact, some of the most far-reaching changes will be in areas customers rarely interact with directly. Trends like hybrid-cloud compute-storage solutions are transforming the way businesses operate, but will rarely be the focus of breathless cable news segments.