Sometimes it is what you don’t do that gets you in trouble. In today’s volatile global economy, failing to act can be more risky than doing the wrong thing. Businesses that don’t prepare for the effects of technological change are at the greatest risk, particularly in industries at imminent risk of digital disruption.
A quick definition of relevant terms is in order. Machines are replacing all levels of employees across large portions of the global corporate landscape. This type of shift is understood as a disruption, which, according to Harvard’s disruption guru, Clayton Christensen, can be defined as that which displaces “an existing market, industry, or technology and produces something new and more efficient and worthwhile.”
Disruptions change the business paradigm by altering the way businesses learn, think, behave and make decisions in their everyday operations.
Here’s the kicker: disruption is not necessarily a bad thing – nor should it be! As Christensen so eloquently said in the same article: “It is at once destructive and creative.” Those teams that prepare for future disruptions and adapt to the ever-changing corporate environment will find the transition from old to new both welcomed and profitable – it’s a change from something less-effective to something significantly more effective.
James McQuivey from Forrester Research predicts digital disruption will be immensely powerful. “The addition to the word disruption does not merely enhance it; it accelerates it.” Merely keeping up with the newest trend in social media marketing or inventing some software is not equivalent to the power that comes with being truly digitally disruptive.
McQuivey ends with a dark warning: “Digital disruption is indeed headed for every team in every company in every industry.” As businesses everywhere enter the digital world, those that arrive late to the game, use mediocre web development techniques, or fail to evolve with the digital landscape will be the casualties of this transition from traditional management techniques to innovative management.
Perhaps the most underemphasised industry sector for digital incorporation is education. Traditional educational models not only fail to produce students prepared to take on the digital world and fill the enormous demand for IT personnel, they also lack the necessary capacities for transitioning from ineffective to the cost-effective.
Even top management professionals in the education sector remain blind to the digital market leaving them far behind. Innovative education would be a truly digitally-disruptive force, causing the rest of the industry to either catch up or be destroyed in the process.
The financial industry has taken a decent hit from digital disruption. Customers of the banking industry are significantly less interested in their relationships with banking institutions, and are far more interested in what their banks have to offer them in real-time and forward-looking analyses. Therefore, banks that hesitate in moving from in-person transactions to real-time, as-needed, on-the-go transactions don’t stand a chance against those banks that quickly transition to the online marketplace. The competitive edge of this industry is quickly diminishing, and companies struggle to find anything that makes them unique competitors, even if they have made the move to digital.
The internet has completely demolished the barriers to entering any market, making the competition between companies fierce. Companies that lead their industries in innovative, digital advancement are capitalising on the immense power of digital disruption – they dominate and control the marketplace, causing inferior companies to either bend to the newest digital trends or get lost in the dust.
In order to maintain any semblance of success in this volatile global market and digital landscape, teams and businesses must develop a strategy to face the challenges ahead. Hesitating or remaining indifferent on matters of digital significance is a risk no company should be willing to take.
In the case of digital disruption, inaction is indeed an action of great significance. In choosing not to act, you are choosing a path of no return. Inaction has no place in the digital marketplace.
So, in moving forward, choose wisely. Companies with strategic-planning processes that include a strategy to prepare for plausible scenarios are the companies with realistic understandings of digital disruption. Those without a strategy could be risking the life of their team, if not their business.