When we think about digital disruption, we think about technology. After all, digital disruption is all about the transformation arising from emerging digital technologies and business models. Moreover, many instinctively associate the word ‘disruption’ with something negative. Undoubtedly, the fact that we are faced with new digital products, services and businesses, throws us out of our comfort zone, and induces – or forces – us to rethink the way we do things and the way we view the marketplace. And the issue at hand is exactly that of of self-reflection and analysis. How will this technology impact our business, our sector, our customers? How do we react? Are we even trained to react to the rapid changes we are being faced with? How do we strategise in such a fluid context? As such disruption envelops organisations across industries, we will probably need to put aside our management textbooks and reinvent ourselves and the way we think.
With new products, services, and business processes permeating our everyday lives and the way we do business, the ground rules are changing constantly, and planning assumes a wholly different dimension. While past experience will still teach us a few lessons, we cannot rely as we did on retrospective analysis as guidance for the future. We need to start thinking about strategy as a competence based on agility and flexibility, as opposed to a competence solely related to content. We need to consider organisations in terms of fulfilling specific needs and solving defined problems, rather than providing products or services. We need to develop what I call a ‘Connected Strategy’ across an industry cluster rather than through an isolated corporate strategy. Finally, we need to structure work across distributed interconnected systems rather than through centralised or decentralised silos.
In practice, there are several emerging technologies which are creating this so called ‘disruption’. For example, blockchain’s Distributed Ledger Technology has recently taken the world by storm, with many proponents joining the bandwagon. But what about the implications of this revolutionary technology on organisations, business processes, or even society at large? Blockchain enables the distribution of decision-making power across various nodes in a wider network, with the potential of making redundant traditional structures such as function and divisional systems. This evolution is placing the value network, rather than the organisation, as the central unit of analysis. As transaction costs are rendered close to zero, also thanks to peer to peer interaction, we are witnessing the growing risk of a gradual dissipation of power from traditional organisational giants to their smaller counterparts. Is the levelling out of the proverbial playing field leading towards a perfectly competitive market?
Lesser-known culprits have also contributed significantly to the emergence of digital disruption. Advancements in Artificial Intelligence, along with big data analytics, have made it possible not only to automate even the most complex of processes that emulate human thought, but also major organisational decisions that were traditionally taken by professionally qualified human beings. In fact, Artificial Intelligence is frequently combined with Smart Contract applications as part and parcel of an Ethereum Based Platform. This platform greatly facilitates the automation process involved in accepting defined peer to peer transactions, provided that specific conditions outlined in the algorithm are being met. The advent of the Internet of Things, or IoT, has brought about opportunities to connect myriad devices around the world to a level not thought possible until a few years ago. Ericson forecasts that by 2022, a total of 22 billion devices will be connected, of which 18 billion will be related to IoT. Meanwhile, Augmented Reality (AR) and Virtual Reality (VR) have opened the doors to opportunities not only in the marketing of products and services, but also in the education sector, where multisensory approach technology enhances the user experience. Needless to say, with such increased connectivity and opportunities for businesses, organisations not embracing the digital revolution are doomed to fail.