Is there any real music in the digital disruptive innovation cacophony?

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Photo Credit: Stacey Young, Flickr

Photo Credit: Stacey Young, Flickr

This morning I read a dozen or so articles. Like an ever growing selection of our collective voices, many of them dealt with disruption and digital. It’s becoming more difficult to sift the meaningful signal from the noise. I’m becoming desensitized and I’m often guilty of contributing to every growing flood of research and opinion related to those two subjects.

But it’s important.

While the congregation of digital participants (and passive observers) get weary of the noise, much of the world isn’t listening, or, more likely, doesn’t quite comprehend what’s happening. So, it’s important to continue to search for, and clearly articulate, the answers to enable us all to move forward more effectively.

The conflict between emerging and legacy ideologies recently came to a head with a column in the New Yorker by Harvard Business School professor Jill Lepore, criticizing and debunking the overuse of leadership concept du jour “Disruption”, specifically calling out fellow HBS professor Clayton Christensen.

Lepore actually has some fantastic points, highlighting the froth and overuse and alleged fear mongering that’s happening. Seemingly everybody is focused on disruption, and innovation, and/or disruptive innovation. But unfortunately, her analysis was a bit shallow and she offered little else to explain what’s happening, other than dismissing the entire body of work as myth.

John Hagel provides some valuable analysis of this saga over on his blog. He also reminds us of salient points that he and his research partners have discovered and published in the “Shift Index“. Specifically, that the “topple rate” of firms has indeed increased by 40% over the past 50 years and the tenure of S&P 500 firms have shortened by 75% over the past 75 years. Clearly disruption is happening.

Christensen, in his commentary about the column, outlines specific evidence from retail, the steel industry, (in addition to the high tech examples in his book) that point to additional evidence that disruption plays out over periods of time, and has indeed played out multiple times in multiple industries over the past 50 years or so. However, the rapid rise and fall of companies like Rim, Zynga, and Nokia provide evidence that the epochs may be shrinking.

Sameer Patel (friend and well respected industry leader) penned an instructive post on a similar topic titled “This Transformation Feels Different. Disruptively So“. It is valuable analysis and worth a read. There’s one line that seized my attention, however, and it sits smack dab in the middle of the argument of how much merit the theory of disruptive innovation has.

“It’s different this time.”

You should know before I comment that I have a bias against this phrase. History has bitten the rear end of millions of people over thousands of years that believed that “it’s different this time”. But Hagel actually backs this possibility up with a good explanation, quoted below (emphasis are mine):

“Yes, we’ve had major technology disruptions in the past – think of the steam engine, electricity and the telephone. But there’s one key difference that helps to explain a sustained and increasing pattern of disruption today.

In all those prior technology disruptions, we saw a dramatic burst of innovation in the core technology followed by a rapid stabilization with only modest incremental improvements in price/performance afterwards. Then one saw a burst of innovation at the infrastructure level in terms of thinking about how to most effectively deliver that technology to the broader economy and society – think for example of the insight that electricity could be more effectively generated in centralized facilities rather than on the premise of the user. But once again, that was followed by rapid stabilization in terms of infrastructure deployment, giving firms an opportunity to think through how to most effectively harness this technology in their business.

Digital technology is different – in fact, it’s unprecedented in human history. It’s the first technology that has demonstrated sustained exponential improvement in price/performance over an extended period of time and continuing into the foreseeable future (based on interviews with scientists and technologists pushing the boundaries of this technology).

So, there’s no stabilization in the core technology components of computing, storage and bandwidth. As a result, there’s no stabilization in infrastructure – cloud computing is simply the most recent manifestation of this infrastructure and it certainly won’t be the last. And therefore there’s no stabilization in terms of how companies can use this technology to create and capture value.

But there’s more. This exponentially improving digital technology is spilling over into adjacent technologies, catalyzing similar waves of disruption in diverse arenas like 3D printing of physical objects, biosynthesis of living tissue, robotics and automobiles, just to name a few. The advent of exponentially improving technologies in an expanding array of markets and industries only increases the potential for disruption…”

One of Lepore’s criticisms questioned the portability of Christensen’s early research of the high tech industry into other industries. But if every company is becoming a technology company, then isn’t it possible that the same life cycles and patterns emerge? In fact, we’ve seen this already happening in biotech, retail, the financial markets, and everything else that is integrating digital into the fabric of their organization.

RELATED: Is every company becoming a technology company?

Starbucks, Nike, Virgin Atlantic – major brands are creating new experiences, and even new businesses, by leveraging digital. They are disrupting their own industry, often finding and inventing white spaces in adjacent or even unrelated one, while simultaneously being disrupted by others nipping at their heels below. Internet Retailer Alibaba is entering the mutual fund business (hat tip Patel). Google is making cars, (and broadband enabling balloons, and wind farms, and thermostats, and in home cameras). Amazon is making smartphones, and is the largest B2B cloud storage vendor on the planet. (They’re also setting out to be the world’s largest wholesale distributor). There is now a globally accepted crypto-currency, and a dozen other upstart alternatives. A peer to peer accommodation network called AirBnB has a greater market value than Hyatt Worldwide.

Go back in time just 5 years and all of the above sounds a bit ridiculous.

But wait. It’s not that complicated

While many people over-hype the changes, and others simply nonchalantly drone on, Evan Williams (Blogger, Twitter, Medium founder) has some insight that helps to bring balance and perspective to the conversation.

“The internet makes human desires more easily attainable. In other words, it offers convenience,” he said. “ Convenience on the internet is basically achieved by two things: speed, and cognitive ease. If you study what the really big things on the internet are, you realize they are masters at making things fast and not making people think.”

I believe this goes beyond convenience, but speed and cognitive ease are the key. As we shift our thoughts beyond people, and begin to extend this thinking to include things and inanimate nodes in an environment working together, you might say that speed and operational ease are key. The ease of use and speed apply to all sorts of automation, and the exponential advance of storage and processing power are opening up new windows daily.

RELATED: The Digitization of Everything: Jumping the Titanic for a Speed Boat

Williams continues:

“It’s not a utopian world. It’s essentially like a lot of other major technological revolutions that have taken place in the history of the world.” He compares it to, well, agriculture. “[Agriculture] made life better. It not only got people fed, it freed them up to do many more things — to create art and invent things.”

“Look at the technology of agriculture taken to an extreme — where we have industrialized farms that are not good for the environment or animals or nourishment,” he says. “Look at a country full of people who have had such convenient access to calories that they’re addicted, obese, and sick.”

Today, many of us have such convenient access to broadband and data and everything else, that we are experiencing a different kind of addiction, obesity, and sickness. The same challenges produced by tech innovation centuries ago merely manifesting themselves in a new, but similar, way.

Wonderful, creepy, amazing, and underwhelming

These are all words that have been used to describe the Magic Bands experience at Disney World. According to reports, they’ve spent between $1 and 1.5 Billion to digitize the amusement park experience. It is the largest investment in theme park history. Disney is betting big that this will transform the experience for their visitors.

They hope to recoup the investment the following ways:

” –By getting guests to plan more of their trips in advance, Disney expects they will spend more of their vacation time on Disney World property, instead of visiting Universal Orlando, shopping malls or other off-property attractions.

–By making food and souvenir purchases as easy as waving a wristband in front of a scanner — the same cash-free model that has been so lucrative for the cruise industry — Disney thinks guests will spend more money overall.

–By collecting more personal data about visitors, from their favorite characters to their spending habits, Disney hopes to develop more effective sales offers customized for individual families.

Disney thinks MyMagic–will help in other areas, too, from luring more people into company-owned hotels to establishing a new souvenir line in the form of MagicBand accessories.”

What then will you do?

  • Is there something to the theory of disruptive innovation?
  • Is there an urgency to invest in digitally transforming your organization?
  • Is this just the next marketing ploy by the technology elite?
  • Does this change the landscape that you are operating in? And how long until that landscape changes again?
  • Should you drone on? Should you listen? Should you act?

Underneath the cacophony, is there actually a symphony in the works?

This post was provided as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are entirely my own and don’t necessarily represent, nor have they been influenced by IBM’s positions, strategies or opinions.

Republished with author's permission from original post.

Brian Vellmure
For more than a decade, Brian Vellmure has impacted hundreds of companies on their journey towards increased profitability through strategic customer focused initiatives. For more insightful thoughts and resources, please subscribe to Brian's blog by clicking here

3 COMMENTS

  1. Brian, thanks for a thoughtful post on an important topic.

    Digital disruption/transformation is real, but I think you’re asking the wrong question.

    The problem is not (just) whether there is any real music among the chattering class urging everyone to transform because “this time it’s really different.”

    The real issue is why are business leaders not listening?

    Could it be that they’ve heard this all before, with every wave of technology innovation.
    The mainframe changes everything.
    Minicomputers change everything
    PCs change everything
    Client computing changes everything
    The Internet changes everything
    CRM changes everything
    Social media changes everything
    Mobile computing changes everything

    Maybe the audience is just bored with the same old song? Or should I say drone?

  2. Bob,

    Thanks for taking the time to read and comment.

    Some business leaders are listening. And many are listening to a cacophony that is not providing any clear or integrated insights or direction – just disjointed signals.

    From my perspective, the real challenge is that most are still trying to solve the challenges of 2011, let alone 2016. (For future reference, this comment is posted in July 2014)

    Many also believe that they are innovating, but they are innovating in the same construct that they’ve been doing so for 30 years. In Christensen’s terms, they are continuing to invest similar ratios into sustainable innovations instead of disruptive innovations.

    There is a body of work that says that this is a recipe for disaster over the long term (while the org life cycle continuing to shrink).

    If you take all of the “changes everything” lines in your comment and instead of making them separate include them on one continuum and make them part of one narrative, it may help leaders to understand a bit more. It’s not something new and different. It’s a continued evolution of progress that is continuing to integrate the physical world with the digital, and the implications are that the feedback loops are getting faster, smaller, and more tightly integrated AND this trajectory is expected to continue.

    If those are true, are today’s guiding principles for how to run an organization appropriate?

  3. Org lifespans are shrinking, and I’m convinced tech is one factor that enables new competitors to disrupt old business models. Whether tech the only or even the biggest factor is a separate debate.

    New technology is available to all at roughly the same time. Yes, there are exceptions, but by the time people like us are discussing, the first-mover opportunity is long gone.

    The issue is change, which is a function of leadership. Newer companies are able to take bigger bets (encouraged by investors who don’t care if 9 out of 10 fail), while the establishment has a successful business model to take care of, and investors to satisfy who value predictability, not risk. (Big exception: Amazon.)

    Couple that with a lack of a compelling “burning platform” and it’s no surprise that the status quo reigns supreme.

    I do think that “disruptive innovation” is overrated, and both words in that phrase are overused to the point they mean absolutely nothing.

    Until business leaders see a compelling reason to change, and know how to lead their organizations to a new future, the past will continue to repeat. Maybe the technologists that continue to say “XXX changes everything” can wrestle with that problem?

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