Disruption causes quantum shifts in industries and societal behavior by digitizing the analog, upending economic models and otherwise challenging the status quo. The disruptors differently and act differently than the incumbents. Let's look at how.
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Business leaders are understandably concerned about disruption. Business as usual is a dangerous proposition in an age when entire industries can be upended by a disruptor armed with cloud-based computing power, lots of data, and effective ways of leveraging that data.
The typical response to the threat of disruption is digital transformation. However, digital transformation tends to be approached as an if/then statement. Specifically, if we embark on a digital transformation journey, then we'll be able to compete effectively in the future.
"What they're not recognizing is you have failed in your business," said Jay Goldman, co-author of New York Times bestseller THE DECODED COMPANY: Know Your Talent Better Than You Know Your Customers and co-founder and managing director of digital workplace solution provider Sensei Labs, "You're not being rewarded for doing something right,"
The quantum shifts that disruptions represent don't happen overnight. A disruptor, like most startups, has an idea it hopes will change the world. It intends to challenge the status quo that has been created by an established order of market leaders with formidable market shares and deep pockets. However, the market leaders don't serve everyone by design because not all business relationships are equally attractive or profitable, so they tend to focus on the most profitable segments and de-emphasize or ignore the less-profitable segments. Disruptors tend to take advantage of those opportunities, such as by serving niche markets or less-affluent customers.
The incumbents tend to ignore such startups because the new contender is relatively small, lacks resources and tends to have far less brand recognition. Moreover, the new contender has decided to address a market segment the market leaders have consciously decided not to serve. Then, when the new contender succeeds in those markets, it has to expand into other segments to continue growing and improving profitability. Ultimately, when the new contender starts to gain market share in the coveted market segments, the incumbents react, albeit later than they should have. As more market share is lost, the incumbents try to copy what the emerging leader is doing, which may not work well, if at all.
"If you say in the next six months we're going to execute this transformation project and at the end of that we'll emerge from this cocoon a new butterfly with everything we need to remain competitive from that point forward, you missed the point," said Goldman. "There isn't a set transformation that will keep you forever in a competitive state, ready to respond to the business environment. The only way to do that is to transform the fundamental parts of the organization so you are in a constant state of evolution and disruption."
Achieving that state requires changing the company's culture, leadership structure and tools.
By comparison, disruptors don't have to transform because they're new and have the luxury of creating a culture, leadership structure and toolset. Following are a few other things that separate the disruptors from the disrupted.
Lisa Morgan is a freelance writer who covers big data and BI for InformationWeek. She has contributed articles, reports, and other types of content to various publications and sites ranging from SD Times to the Economist Intelligent Unit. Frequent areas of coverage include ... View Full Bio
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