Digital Disruption and Transformation – it is about the people. Part 1 of 3

Part 1:Digital disruption: Thrive on change

Digital disruption is 100 percent pervasive.

There is no business, no service, no industry that will not be affected in some form. In other words, if you want to sustain your particular business/service/industry, you have to do your own digital transformation. Otherwise, there is a very high (if not probable) chance that you simply won’t be here in the medium to long term.

So, I have linked digital transformation with digital disruption to make the simple point that if you don’t transform you will be disrupted.

There are a lot of quotes on this subject, but there is a very consistent theme in terms of the reason why digital transformation is so critical for any organisation.

One such quote, via The Wall Street Journal, is by business/technology guru Tom Davenport, Nov. 12, 2014:

“If digitization were a good idea for its own sake, companies should calculate the amount of digitization they have—maybe using a percentage or an index. They should benchmark themselves against the digitization of their competitors. There would be a strong correlation between a company’s digitization score and its financial performance.”

Source: http://www.tomdavenport.com/wp-content/uploads/What-the-Heck-Is-Digitization-Anyway.pdf

Another good quote is this definition:

Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services.

Source: searchcio.techtarget.com/definition/digital-disruption

In terms of digital disruption, it feels like a week doesn’t go by and we hear about another “surprising” digital disruption.  Amazon buying Whole Foods took the market by surprise. No matter which way you look at this, it would have been hard to predict this.

Or would it? Could we have predicted a Netflix, or an Uber, or an Airbnb? Of course, the list goes on and on.  Predicting the future is clearly not a science — otherwise, I could trademark the algorithm and become very rich and famous.  However, there are a number of robust models that help give us a view of the future.

Predicting the next Uber

There are two models pertaining to the future that I would like to draw on: horizon scanning and value chain mapping.

Horizon scanning is about foresight — i.e., it’s not a prediction but more about developing ideas about what plausible futures may look like. What we know or don’t know can be broken down. Cue the famous Donald Rumsfeld quote: “the unknown unknowns.”  More broadly, there may be areas we know we don’t know, and the smallest area of all is what we know.

A horizon scan is a view of the probable, and possible, futures of a specific topic. It involves a systematic examination of information from sources and experts to identify potential opportunities.

Value chain mapping is a topic in its own right and one that fully deserves its own thread.  Simon Wardley from DXC Technology’s Leading Edge Forum is the thought leader and executioner behind this.  He was written many articles and a book on how to use value chain mapping to help predict the unpredictable (see Wardley Mapping on Simon’s blog).

To get a real understanding of this you need to read Simon’s blog posts. In very brief summary, using value chain analysis — understanding the economic change cycle of “peace,” “war” and “wonder” — and watching the weak signals, we can start to see when points of change are most likely to occur, whether that’s in 3D printing, IoT, currency, etc.

The peace, war and wonder cycle mimics the adaptive renewal cycle in biological and social systems, along with long waves (K-waves) in economic systems.

We don’t pretend to be able to see the future in detail but believe the overall pattern of business and technology change is more predictable than many people think.  Research has shown that activities evolve through four phases: genesis, customer-built, products and commodity/utility services.  The latter forms the basis of entirely new worlds of wonder, such as electricity eventually enabling air conditioning.  This process of evolution can be highly disruptive to traditional industries.

So, if digital disruption is inevitable, how can an organisation prepare for it and be there before it’s too late? How can the organisation thrive on change? I’ll discuss this in my next blog post. <End of post 1>

This post is part 1 of a 3-part series.

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