Disruption, disruption, disruption…. Almost every conference you attend, magazine and website you read, or speaker will mention disruption. It sounds great, but is the world around us truly being disrupted – Really? Disruption sounds cool – everyone wants to be a disruptor and change the world (for the better!!), but is it ‘disruption’ in the true sense of the word? I am specifically referring in this post to ‘disruption’ and its important to distinguish this from other concepts such as disruptive innovation. Here are 5 reasons why I think disruption is a myth…..
1. “Every threat to the status quo is an opportunity in disguise.” – Jay Samit
The Oxford Dictionary defines Disruption as a “disturbance or problems which interrupt an event, activity or process”.
So I would conclude that disruption is temporary. The disruption, a bit like a pebble in your shoe, is felt for a little while but then you deal with it and move on. The ‘norm’ returns. The ‘norm’ is not returning though. The transformation is permanent, and a new norm is established.
2. ‘When you’re finished changing, you’re Finished’ – Benjamin Franklin
The Forbes article Ray Wang: Cloud Is The ‘Foundation For Digital Transformation’ states that “Since 2000, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired or ceased to exist”. It is an amazing statistic, which according to Wang has been enabled in an accelerated manner through the digitalisation of business. I don’t call that a bit of a disruption, that’s a revolution!
Wang goes on to share that its not just about the technology, but the way in which technology is being utilised within a business model. This is a key point because the ‘disruption’ debate often focuses on specific technologies and what they can / cannot do. Clearly the above statistic highlights that many corporates are missing the point and failing to recognise the opportunities to incorporate the new technologies into their own business models.
3. “The optimist sees the donut, the pessimist sees the hole” – Oscar Wilde
Disruption is all about perspective. If you are resting on your laurels then developments around you will be perceived as disruptive. It is here that I have a problem with the very loose use of the term ‘disruption’. Old school businesses especially in the early days of the digital revolution will not have understood the threat of disruptive innovation, and by calling it disruption the incumbents probably thought that it was a temporary blip.
The Cap Gemini Digital Transformation Review cites many examples of where corporates have failed to embrace the technology and/or recognise the presented opportunities:
- This is how we always do it – Blockbuster for example failed to recognise companies such as Netflix who were operating in the same market segment but doing things differently. We all know what happened next…
- Clinging on – Kodak is highlighted as a business ‘holding on to’ its film based business and holding back its investments in digital technologies..
- Embracing Change – Apple on the other hand are highlighted as a company that have products that ‘cannibalised one another’ – with Tim Cook (Apple CEO) saying “out core philosophy is to never fear cannibalisation. If we don’t do it, someone else will”
- Recognise the Opportunity – Rachel Botsman reveals the sheer speed through which collaborative business models can make things happen. Rachel shares how it took “Hilton Hotels 93 years to build an inventory of over 600,000 rooms; Airbnb got there in just 4 years, and they now have close to 900,000 rooms”
4. It is not the strongest that survives, nor the most intelligent. It is the one most adaptable to change – Charles Darwin
I cannot stress enough the Cap Gemini Digital Transformation Review is a must read for anybody interested in digital disruption. Key thinkers from various industries contribute to the paper and to me evolution was the key theme – not disruption. Over and over again, the contributors highlight various examples, stages and strategies to look out for. Didier Bonnet, Jerome Buvat and Subrahmanyam KVJ suggest embracing ‘digital disruption’ by:
- Understanding your customer grievances – what pain points does your customer experience?
- Challenging the status quo – ask ‘what if’ questions…
- Reviewing your business model
- Organising resources around opportunities
To me that sounds like good ol’ fashion advice. Nothing disruptive there, eh?
5. “To improve is to change; to be perfect is to change often.” – Winston Churchill
You’re probably wondering what the heck has all this got to do with Payments and SEPA? Hahaha… Globally we are seeing many exciting developments in the payments space. Lets review the above 4 points in the context of payments / banking services:
- As customers we don’t like paying high fees to make a payment, and when we make a payment we don’t particularly want to wait 1 or 2 days for the payment to be executed – Digital currencies are reducing payment fees and enabling almost instant payments
- Realising the extent of the global unbanked population many mobile payments schemes have now emerged
- Some unlikely operators are now developing payment solutions – for example a coffeehouse – Starbucks, and an electronics company – Apple
- We’re starting to see banks build up their solutions and partner with new providers and/or technologies
Retail, shopping, online banking, cyber security – day to day things that we are all very aware of are being impacted by new technologies that are dramatically changing the way in which we make a payment.
The world around us is changing. Chris Skinner refers to the changes as a clash between the ‘suits’ and the ‘jeans’.
Processes and products are not being disrupted, they are evolving. Even down to the way in which you send your payments to the bank. Its not disruption, its about making positive change that can remove complexity and enable nimbleness in your organisation….
What do you think?
You could argue that its playing with words, and that’s partly true. But the word disruption can be interpreted in different ways, and if misunderstood can prove disastrous. I will end by saying that evolution is being enabled in an accelerated manner through digitalisation, technology and innovation. The resulting ‘Revolution’ – one system or process being replaced by another – is creating a ‘new order’ which is changing the way in which we work, rest and play.
I’d love to hear your comments about this post below.