Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods, as well as services. Talking in simple terms, digital disruption is when a company or organization uses digital resources to provide more value to more people than the competition.
When we take a look at some online portals like Amazon, eBay, Facebook etc. They have simply accelerated the potential for digital disruption. Even media channels take this approach for pepping up their products. Digital disruption can give an edge to any technology portfolio. Quite naturally, everyone wants digital disruption so that his or her goods and services can succeed in the market.
But How Do You Get Digital Disruption?
Without overlooking any technical aspects, let’s take a look at how one may disrupt. The first step in starting the potential for digital disruption is to get people to try your products or services. One way to do this is to offer your products and services for free or at discounted prices. Once enough people are using your products or services and are delighted to use them, the word-of-mouth effects should take care of the rest.
Your users will invite more people to use your product or service. They may also use your products and services over existing ones. This is what organizations such as Uber, Amazon and Facebook have done successfully.
This is a very surface level interpretation, however, there is a lot of depth that needs to be explored. Keep reading…
Habits of Effective Digital Disruptors
The moment organizations understand the full concept of digital disruption; it can immediately become a scary thing. In the past, barriers to entry such as cost kept the rate of disruption in business slow. However, with the birth of new technologies like software applications, social platforms and search engines like Google, the potential for disruption has accelerated.
Today, most of those barriers to entry that kept organizations safe are no longer there. More people have access to digital technology that when utilized properly can accelerate new ideas and bring them to market faster.
No organization is safe from the threat of digital disruption. However, organizations may adapt and remain competitive by modifying their business model, acquiring better systems for operations and copying what digital disruptors are doing. Essentially, you want to copy their mindset and behaviors.
Hint: Digital disruptors are extremely customer focused!
The video below explains what digital disruption is, what it means for you and your organization, including how you can avoid being a victim of disruption.
Here are some habits of effective disruptors that you can emulate.
1) They Innovate and Take Calculated Risks
Some traditional organizations had expressed mixed responses towards digital disruption in the past. Roughly more involvement occurred after the first year of its emergence. To add an interesting side note to this information, research indicates that a lot of bankrupt companies that went out of business due to disruption responded to digital disruption only when it was too late.
With the prevalence of digital disruption, technology cycles get shorter. There is a strong urge for idea and innovation. Companies need to come out of safer grids and start taking calculated risks like effective disruptors do.
Calculate risk and focus on the minimum feasible products that can be brought to market quickly. Once your product is in the market, you can easily launch the upgrades to improve your product and add more value through innovation.
For instance, Philips had launched lighting solutions to the public but with time, they added unrolled sensors that allowed their lights to turn on with human presence otherwise known as motion detection.
2) Be Bold and Ditch Traditional Hierarchy
This can only occur when one is ready to ignore the traditional organizational rigidity as far as internal processes are concerned. You may need to ditch the internal corporate hierarchy and make some adjustments to your processes like reallocating your resources and employees.
One example of being bold and ditching traditional hierarchy is the online retailer Zappos. The company eliminated the workplace hierarchy system to encourage more collaboration. Now, employees perform in teams and the job profile evolves according to the changing needs of their customers. Now that’s customer-centric.
3) Make Calculated Investments
Much like risk, investment has to be determined or estimated as well. Digital disruptors always head for calculated investments. They take advantage of free or paid digital products or services from organizations that offer products or services that are in sync with their objectives.
For instance, recently Apple strategically invested $1 billion dollars in a China-based ride-sharing app called Didi Chuxing. The purpose of the investment was to help the company better understand the Chinese market. This investment gave Apple a stake in the growing ridesharing economy and car technology. A great strategy but ideally, you want to stay focused on the business area that is most related to you.
4) Be Open to Innovation
Stay open to ideas and innovation because it appears to be the formula for success in the current world economy. Get your team involved in brainstorming sessions for innovative ideas and solutions that improve customer experience.
You want to be open to new ideas and solutions no matter who in your organization is sharing them. HBO recently started to drive innovation using “Team B’s”, an idea that was inspired by the CIA (Central Intelligence Agency). Basically, HBO handpicks talented employees and places them in groups with the purpose of challenging conventional wisdom.
5) Keep Your Goals Precise
For a disruptor, speed and agility are always in play. For example, the Spanish-based fashion retailer Zara operates under the philosophy of quick manufacturing at an affordable price, which brings more trendy clothing to consumers quickly. Essentially, allowing the mainstream consumers to buy current clothing styles at a lower price.
Normally, you need stable management to survive disruption. However, by keeping your organizational operations flexible to change, you may keep up with disruptors. Keep your strategies, ideas and culture flexible, as well as try to hold on to your customers for the long-term.
Digital disruption has somewhat become a byword of the 21st century for putting aside traditional organizational business models and workplace hierarchy. In fact, it is like creating a new order or a new way of doing business.