Disruption and Stuff

They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business
Theodore Levitt, 1960.

This is one of my favourite quotes about the importance of remaining customer centric. The customer didn’t want to use the railroad, the customer wanted to meet and speak with their friends and family. So when technology (planes, cars, even the telephone) changed the market, the railroad companies weren’t ready.

This in a nutshell is both what happens when new technologies disrupt a market, and the best way to combat it – remain resolutely customer-centric in your thinking. And technologies have been disrupting markets since probably the invention of the printing press. New inventions change the boundaries of what’s possible.

It’s incredible to think that one of the biggest players in the music industry is Apple, a technology company. Napster and the early peer-to-peer networks gave the music industry a clear view of a workable technology that solved a major logistical problem – distribution. But the music industry reacted by suing Napster and assuming the majority of people would never be interested in music without a physical component. And now iTunes is owned by Apple and not Sony or EMI or one of the other large labels.

These stories are well known, and there are so many of them, because technological innovations are happening at an ever-increasing rate. The growth of innovation is exponential – any new innovation will help you innovate further, thus speeding up the process of change.  Both Uber and AirBnB rely on the invention of Google Maps (as just one example) to make them work. Innovations stack.

And we’ve reached the point where new innovation happens so regularly that we’re in an almost constant state of disruption. The pace of technological change is at an all-time high. However, this doesn’t necessitate cultural change at the same pace, which is why understanding you customer and understanding human behaviour is so critical. Tech changes fast, humans change slowly. So, we need a way to work with technology that changes rapidly.

That’s why phrases like ‘constant beta’ have become buzzwords. At their core, what they mean is creating a technologically flexible organisation, that’s capable of adapting new technologies to meet their needs. It’s a way of dealing of technological uncertainty and adopting a mindset that allows for the possibility of rapid change.

A future post will look at how to become a flexible organisation that can take best advantage of new technologies, critical to make the best of digital transformation. It’s important to note that the first step is to understand we’re not dealing with a totally new form of business, but that digital transformation is simply a new expression of an age-old problem – how to do business well.

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