Digital disruption may not be the top cause of CIO insomnia, but give it time.
In the modern era, such disruption has been in play since Amazon.com decided to sell books online and slowly cut off brick-and-mortar life support. With the rise of social media, cloud computing and mobile apps, phones and tablets, the business models and operations of all companies in all industries are at risk of being disrupted.
Examples abound. Transportation apps Hailo and Uber are disrupting the taxi industry. Apple's iTunes and iPod disrupted the music industry long ago. Netflix, of course, destroyed video stores, while the likes of Orbitz and Expedia made travel agencies a relic. Amazon has disrupted two industries: retail (books, consumer electronics, clothing, etc.) and IT infrastructure. Mobile map and GPS apps have replaced standalone GPS devices. The list goes on.
Is your company at risk of being disrupted by a nimble outside force? Of course it is.
But how do you unleash your own digital disruption? How does a healthcare, retail or financial services company, especially a big one, even start down this road?
Forrester VP and principal analyst James McQuivey tackles these complex questions in his illuminating new book Digital Disruption: Unleashing the Next Wave of Innovation.
Adopting a digital disruptor's mindset is an essential first step, writes McQuivey. But you also need to adjust your company's policies and practices -- easier said than done at enterprises bogged down by bureaucracy.
[ Get another look at McQuivey's work in his InformationWeek column Digital Disruption: Don't Get Left Out. ]
McQuivey's not a fan of the recent trend whereby companies create digital organizations run by chief digital officers (as the likes of Starbucks, MGM Resorts and the city of New York have done). He thinks companies must make it clear to all employees that digital disruption is everyone's job, not something for a committee of the good and great.
With that caveat in mind, here are four strategies IT executives can use to start digitally disrupting their own business, according to McQuivey.
1. Establish Digital Disruption As A C-Level Priority
The C-suite gives lip service to staying ahead of the digital curve, but for the most part rank-and-file employees aren't buying in yet, according to Forrester research. So CEOs and CIOs must repeat the digital disruption message frequently and not just "shout from the top," writes McQuivey.
"How often does your company hear threatening or worrisome messages about your industry's ability to keep up with the changes that digital will bring?" he asks. "And how often does the C-suite offer evidence that it has the matter well in hand? Once a year at a big retreat? Once a quarter?"
Companies should also designate a senior executive with formal responsibility for digital, writes McQuivey, but give that mandate to the COO or some other exec with broad authority (rather than naming a new chief digital officer) to show that the entire company is taking digital seriously.
2. Identify And Then Work Around Internal Barriers To Digital Disruption
And it's very challenging to overcome what McQuivey calls the culture of "their fault."
Getting all the department heads together and letting them vent isn't an effective approach in McQuivey's experience. But he has seen barriers to digital disruption break down in the context of a high-priority company project.
"If, say, an insurance company wants to completely revamp its claims process, the execs in charge can use that mandate to diagnose the barriers to digital disruption in that context," writes McQuivey. "The goal here is still to identify the blockages in the flow of innovation, so you can plan how you'll handle those bottlenecks. Are there cross-functional roles that need to be established? Is there a C-level intervention that can resolve differences? Can the company work on the issues across teams to identify possible process solutions?"