Digital disruption is not a new phenomenon. Like the industrialisation of the 18th and 19th centuries, the rush to digital is the latest revolution in the way we work.
With the Internet and smartphones emerging as life-changing pieces of technology, digital ways of working have smashed the existing order, just as industrial ones did historically.
Yet the development of technology is only ever the start of the process. Electricity was, after all, invented long before we could put it to widespread use. The pace of change has been more rapid and marked now that the full capability of digital technology is being realised and it’s this that is truly transformative.
The lessons of industrialisation show that such changes of working practices result in huge, irreversible, alterations to our entire ways of life. Yet, so far the impact of digital disruption has been seen through the prism of individual companies and the impact they have had on the sectors they have disrupted – such as Amazon on shopping and Uber on taxis.
Think like a disruptor
Increasingly we can see two things emerging from the digital disruption phenomenon. Firstly, existing firms need to adapt and take steps to avoid leaving a space open for a disruptor to catch them out. That means considering big changes to working practices and thinking like a disruptor.
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That shouldn’t be a negative thing either. What ‘thinking like a disruptor’ means, in effect, is putting the customer first. What do they want? What would make their life easier? By properly assessing current practices – and the latest innovations in smart technology – it’s possible to look at completely new ways of working.
Strategy& says this means thinking like a start-up, innovating and developing new methods and being proactive, rather than reactive to the changes going on elsewhere.
To be able to behave in this way, companies must be able to think on their feet. They need what 1E describes as ‘fast, agile IT’ so that change can be delivered quickly and opportunities can be seized upon.
That means businesses understanding properly how they currently work, streamlining processes as much as possible and being able to deliver potentially large-scale change in a swift manner. Start-ups aren’t held back in this and so companies looking to avoid falling behind shouldn’t be either.
Secondly, it’s time to consider what this means for whole sectors and, as a result, the economy of countries and regions.
When it comes to banking, that’s a sector that is particularly prone to the challenges posed by disruptors. Big banks are still disliked and mistrusted following the economic crisis and smaller scale digital ‘Fintech’ upstarts have the knowledge and ability to react quickest and best to the market they operate in.
Smartphones are at the heart of this – with the ability to not only digitise transactions but also now our wallets, with contactless payments growing even more common.
James Haycock, managing director of Adaptive Lab, said: “It’s plain to see that a perfect storm of competition, technology, shifts in customer behaviour and regulation looks set to wreak havoc on the businesses we trust with our money.
“It’s a matter of when, not if, banking is reinvented. A new generation of companies and leaders are tearing the rulebook to pieces, adopting new technology, new working practices, and serving customers whose lives are increasingly orientated around their mobile phones better than traditional banks can currently.”
But banking, disliked as it may be in some quarters, does not operate in isolation. Financial services are a large part of the economic success of giant cities such as London and New York.
For some, the key to a strong economy is to foster a generation of bright young talented people that can take on the disruptor’s mindset and help keep their country at the head of their game – and maybe even break into other specialist areas.
Phil Smith, chief executive of Cisco UK and Ireland, told City Am: “To embrace digital, we must re-educate the educators, and work to change the perception of how a job in technology is perceived by young people; making it less about coding and more the capabilities of technology to reinvent business and society at large.
“As the digital opportunities grow we must ensure that the required skills are being developed nationwide, whether this is through collaborations between business and education institutions, investment in innovation incubators or the implementation of the appropriate infrastructure.”
A good example of that may well come in the form of driverless cars. Here’s a way in which digital technology is working to overtake the existing order in the automotive sector.
Projects in Japan, the US, Sweden, Germany and the UK are engaged in a race to deliver the first marketable driverless car and, clearly, the economic benefits of being ahead of this race could be massive.
Yet this requires a form of ‘joined up disruption’ – different sectors and industries working hand in hand to overthrow the existing order and that, in turn, will require the political leadership Smith wants when it comes to education.
That political leadership may be tough to realise – especially when governments themselves are not protected from the race to embrace digital processes and deliver public services in a way that is smarter, in both senses of the word.
In a report on diginomica.com, Joel Bellman, public sector digital partner at Deloitte, said: “In terms of efficiency and money saved, there is a great deal to gain from digital public services. Citizens are accustomed to excellent digital services in other areas of their lives and do not accept that government is immune from this.”
He added: “The technology is there for the public sector to take advantage, yet it lacks the culture, skills, governance and leadership to do so.”
It’s clear, therefore, that governments have their own challenges internally and externally when it comes to disruption. They too must automate and cater for the needs of a digitally savvy market. Embracing change and grasping the agenda could be key to getting sustainable economic growth.
But failure to do so could be problematic. Trying to be a digital Luddite or lacking the foresight and leadership to take on the digital agenda can have fatal consequences. It’s true, after all, that 52 per cent of Fortune 500 companies have gone under since 2000. A fast-paced world can easily mean a fast-paced decline.
Whether you are a start-up, existing company, or industry leader the message is clear: disrupt or die. Nations, so reliant on their core industries for success, need to sit up and pay attention.
Further reading: UK workers shun social media at work