Few would argue that we are not living in a time where entire industries and massive brands are being heavily disrupted. When solutions to old ways of doing things are combined with technology that facilitates innovative new ways of looking at and dealing with those problems, we tend to see market and digital disruption on a huge scale. Technology is often the driver for the innovation that we see today, yet business model changes and new marketing channels are combining to make this an even larger challenge for many.
New technology has to embody key innovations in order for real disruption to be realized at the levels we are seeing from the likes of Airbnb and Uber. What I mean by that is that tech innovation isn’t just about new capabilities, being the first to market or crazy ways of using or combining technologies to develop something different. Though these are all components within disruption, being successful at digital transformation of market sectors requires that companies combine these technology innovations with clear new business models and solutions that speak to the actual need of their market, and that allow the disruption to occur seamlessly and with a profit.
If we look back to the late 90’s and early 2000’s, we will recall technology disruption on a massive scale. The disruption that mass adoption of the internet spawned copious startups, venture capital investment and software applications that no doubt were innovative, however most lacked the business model, solutions based approach we are talking about here. Hence we saw a massive crash (the dot bomb) which occurred in 2000.
This crash should have shown many in tech, funding as well as startup entrepreneurs that all drive tech that old-world economic rules will have to ultimately be applied to the new internet and technology age. Many simply weathered the storm as best as possible and got right back to the same game, and we are still seeing a lot of this being played out today as more technology startups with massive investment fail, while very few rise to the market disruption level.
I believe if you are going to really understand digital disruption that is occurring within businesses of virtually every industry and of every size today, as well as really grasp what innovation and disruption is, we need to better understand how it is affecting business and what the drivers are. To this end, a recent study by Harvey Nash, in conjunction with KPMG, asked executives who said that they are experiencing digital disruption, what the primary sources of that disruption were. The answers should provide a clear indication of how technology, innovation and market disruption occur.
If you are currently experiencing digital disruption, what is the primary source of disruption?
Among other things, the Harvey Nash/KPMG study also covered how companies are attempting to handle the digital transformation of their various industries. There is clearly no consensus on how to best handle this massive challenge and executives are split equally on the methods they are actually using to do so.