Digital Disruption in the 21 st Century Dr. Art Langer Columbia University
The Big Question How can we anticipate the unexpected threats brought on by technological advances that could devastate our business?
What are the Typical Disruptor Factors 1. A New Approach 2. A Strategy not Previously Feasible
Timing is Everything Disruption occurs when a new approach meets the right conditions. Interestingly, conditions are always changing because technology accelerates change. You must have the right solution, but if the wrong conditions exist in the market, your disruption will not work
The S-Curve Lifecycle and Technology Acceleration The S-Curve keeps shrinking Thus we have less time to capture a market opportunity and far less time to enjoy the length of our success
The world is changing at an accelerating rate How will new waves of disruptive technologies affect the organization? Shift in the way service is delivered, managed and measured
How do we cope or avoid negative effects of Digital Disruption? speed > cost empowered workforce choice of devices on demand infrastructure Consumerization of Technology: The need for new forces in organizations
Key for Disruption: The Customer is closer than you think
Time to Reach 50 Million Users Radio: 38 years Television: 13 years Internet: 4 years Facebook: 3.5 years Twitter 9 months Instagram 6 months Source: Bund Leger: 20 Fresh Mobile Threats
Living with Digital Disruption Understand new threats What is the Asset Specificity? Willingness to develop Risk Models Knowing where you are on the S-Curve How agile is your organization? Do you employ multiple generations of thinking? Can you think about your customer in a different way?
Understanding New Threats: The 9 Patterns of Disruptions 1. Expand market reach (connect fragmented B&S) 2. Unlock adjacent assets (see new opportunities) 3. Turn products into new platforms (launch multiple products) 4. Connect peers (promote individual ideas from within) 5. Unbundle products and services (multiple buyer options) 6. Distribute product development (no single point) 7. Align price with use (variable options on use) 8. Shorten the value chain (deliver faster) 9. Converge products (1+1 > 2) Source: Deloitte University
Develop Risk Models You cannot avoid disruption by being conservative Try to integrate disruption risk with acceptable company risk models Calculate a failure rate that works and invest in new independent organization structures to bring forth new ideas
Asset Specificity In the context of technology, Asset Specificity relates to the advantages that an organization may have over its competitors due to specific assets it owns or has access to. Typical examples include location where an asset exists, like wine or oil. Another is delivery advantages because of location, like a Columbia University in NYC. Technology threatens the advantages of Asset Specificity because it overcomes boundary limitations, for example on-line learning will disrupt physical university location advantages.
Where are you on the S-Curve Organization leaders must have some idea where their products or services are on the s-curve as this will dictate its susceptibility to disruption. High Disruption: Product/Service approaches commodity Possible Disruption: Product/Service approaching maturity Low Disruption: Product/Service in early market penetration
Creating Agile Organizations Think of Technology as a Dynamism Establish organizations that can respond to the dynamism based on Langer s Responsive Organizational Dynamism (ROD).
Creating Agile Organizations: Organizational Dynamism
Integration of Millennials (Gen Y) Gen Y adults appear to have many identities and capabilities that fit well in a digital-driven business world. They possess attributes that align with the requirements to be an entrepreneur, a person with technology savvy and creativity, someone who works well in a mobile environment, and is non-conformant enough to drive change in an organization. The presence of Gen Y personnel can help organizations to re-strategize their competitive position
Customers and the reality of VUCA V Volatile Vision U Uncertain Understanding C A Complex Ambiguous Clarity Agility Reference: Filippo Passerini, P&G
Law of Disruption The distribution of change is uneven Technology changes exponentially, but the social, economic, and legal systems change incrementally Unexpected and unintended phenomena are natural by-products eg: newspapers Breakdown of the social, economic, and legal systems are lagging
Thoughts relating to Europe Advantages 1. Educational Institutions 2. History of Invention 3. High quality of products and services 4. European Union Disadvantages 1. Regulations 2. More Gov t incentives for Entrepreneurs 3. Cost