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Digital disruption is nothing new, but the pace is quickening

18 Dec 17

With so much hype about digital disruption, you would be forgiven for thinking it's a new idea.

For decades, businesses across the spectrum have battled to outdo each other to attract more customers with exciting new services, products and other offerings. Over time, some stay ahead and others have been relegated to the history books.

It’s also nothing new that technology has been central to separating the pack and those who can leverage the right innovation at the right time tend to succeed. What is new, and what is changing the way companies change, is how fast that process has become.

Historically, a big brand might have had years to react to a change in the market and develop a carefully-planned strategy to address it. But now, our software-defined world brings the ability for this shift to occur in weeks or even days.

We can see this dramatic change in our daily lives. Look at your smartphone – how many services, devices, products and activities have been relegated by it? Banking, shopping, gambling, job hunting, interacting with friends and family, going to a meeting, and so much more can now be completed anywhere using only your thumb.

In business terms, this translates to ideas being rapidly prototyped, tested and deployed to the masses. Big businesses aren’t as likely to be the ones coming up with these ideas. The fast-moving nature of the new world is much more suited to start-ups, which have great ideas, ambition and aren’t restricted by timely and complicated processes that tend to set in as companies grow.

While there are exceptions, most of the traditional big companies have lagged behind upstarts that are true pioneers of digital innovation. Uber, Airbnb and Netflix are the obvious examples that come to mind, but you can see the trend across all industries.

We’ve seen plenty of this digital disruption in Australia, but I don’t believe we’ve experienced the full brunt yet. There are laws and regulations in place that prevent barriers to challenging traditional mainstay businesses – think of how long it took Uber to get wheels on the ground here. But innovation always wins and these barriers are temporary.

So what should more established businesses do? Do we just transition to a state where the next start-up will take over, until one behind it comes up with something new? One solution could be found in the relatively new concept of the Chief Disruption Officer or CDO.

Apple co-founder Steve Wozniak was among the first to highlight the need for such a role. It means someone who comes in and identifies disruptive threats and turns them into opportunities, shaking companies out of apathy and forcing them to capitalise on and lead how their industries change.

Consider how Kodak might have thrived if it had a CDO to guide it into the world of digital and social image sharing, by capitalising on the technology first and going on to partner with early pioneers of mobile phones – most now too fallen to disruption. If the CDO gets there first, others won’t and your business can stay relevant.

We can see examples everywhere. Think of how something as formerly straightforward as the datacentre is changing – traditional three-tier IT infrastructure is fast losing ground to still relatively new inventions such as public cloud and hyperconverged infrastructure. This particular change is important, as it’s a key driver to enabling other industries to change their own digital identity.

It’s starting to catch on – I find myself speaking to more and more CDOs or people in similar roles who have been hired and commanded by their companies to change the status quo.

It can be a tricky one to get over the line. Chief Information Officers (CIO) and even Chief Innovation Officers (CINO) have roles that are more obviously positive from the outset. People have an understandable tendency to fear big changes and disruption to their working lives, which can make business leaders reluctant to put their people through it.

There are alternatives. One solution, albeit not a very sustainable one, is to buy out the competition. Unilever took notice of the burgeoning market for cheaper male-grooming products and bought Dollar Shave Club for a cool $1.3 billion. It might nip it in the bud temporarily, but being so reactive means you’re on the backfoot.

Other ‘think like a start-up’ options include investing in start-ups themselves and incubators to house them. Start-up accelerator muru-D, for example, is backed by Telstra. Connecting to this source of energy promotes and encourages new ideas and thinking within Telstra, and others could learn from this.

The simple fact is that change is happening faster than ever before, and also slower than it will for a long time to come. Being first can mean not finishing last, and Australian businesses need to encourage a start-up culture and be brave enough to disrupt themselves to stay in the game.

By Carlo Nizeti, Systems Engineering Director, Nutanix