Caution: Disruption Ahead

TIDE: Waves of Disruption

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TIDE

TIDE is an acronym we have been using at CabForward℠ to describe the power of Technology, Innovation, Disruption and Entrepreneurship in our rapidly changing world, launching us into a Star-Trek-like future. TIDE reflects the digital transformation that is taking place in all industries globally. TIDE challenges the complacent with new ways of living and working. Impending disruption is seen on every horizon. And, it is happening all around us, all the time.

Digitally transformative software is reshaping entire industries, changing the way we do business and run our daily lives. As we engineer smarter software it gets better at helping us accomplish everyday tasks and activities. In essence, our ways of life are being reinvented.

The Road to ReinventionIn his new book, “The Road to Reinvention,”entrepreneur Josh Linkner, says businesses, and entire industries, must “Disrupt or be disrupted.” He argues that “fickle consumer trends, friction-free markets, and political unrest,” along with “dizzying speed, exponential complexity, and mind-numbing technology advances,” mean that the time has come to panic as you’ve never panicked before.

Big Bang DisruptionLarry Downes, an Internet analyst , and Paul Nunes, Global Managing Director of Research at the Accenture Institute of High Performance, insist that we’ve entered an even scarier stage of “Big Bang Disruption.” “This isn’t disruptive innovation,” they warn. “It’s devastating innovation,” because disruptors can come out of nowhere. Entire product lines or whole markets can be obliterated as customers flock to products and services that deliver a better and more personalized experience.

Disrupt or Be Disrupted

It wasn’t that long ago that the only way you could shop for a new car or truck was to actually go to the dealership and engage a salesperson. I recall the murmured sounds of amazement at a technology conference when the facilitator asked if anyone had purchased a new car over the web! That was considered either very brave, or devastatingly foolish back then. Either way, it was the beginning of the kind of innovation that Downes and Nunes say is happening more rapidly and with more frequency.

Through innovation, better software and security safeguards, eCommerce has exploded. The internet now handles more than 500 billion transactions per day, with mobile banking accounting for 20%, according to the Ayden Mobile Payments Index. And, thanks to the availability of open source software, production costs have decreased, and the ability to quickly iterate has empowered entrepreneurs to take their ideas to the marketplace.

amazon.comThe retail story over the past 14 years has been the rise of online shopping. Amazon, of course, is one of the world’s largest retailers. They sell 306 items every second at peak times! Apple has now surpassed Staples to become the second largest online U.S. retailer. In 2013 the iPhone and iPad maker’s online sales increased by 24 percent up to $18.3 billion. Globally, eCommerce is projected to reach 1.77 trillion dollars by 2017. That takes a lot of technology performing flawlessly in the background, taking and confirming orders, securely handling financial transactions, notifying the warehouse, initiating shipping, and following up after delivery to test customer satisfaction.

Increasingly, companies need to disrupt themselves or be disrupted. The only way for a company to be competitive in the future will be to act like a startup. Fifteen years ago, Salesforce.com shook up the enterprise software industry by offering “software as a service.” It allowed software to be purchased on an as-needed and per-user basis rather than as an expensive monolithic platform. It mocked industry leaders Oracle and IBM by declaring the “end of (proprietary) software.” Today Salesforce.com generates more than $4 billion in yearly sales and is the leader in its market.

Innovation Is Changing Development Strategies

With thousands of web and mobile apps entering the market weekly, commercial dominance has never been more difficult. There is greater competition for users who, in turn, are demanding more innovation to meet their needs. Entrepreneurs are now leveraging information technology to develop new ideas and challenge incumbents.

Caution: Disruption AheadBy using an iterative process based on a series of low-level experiments, software, hardware and even infrastructure can be easily re-purposed to speed development process. So, you can outsource components from a variety of resources, have them assembled, packaged and distributed by third parties, and get an experimental product to market quickly. This allows the entrepreneur to quickly evaluate its acceptance by the end user. These early experiments may not be disruptors, and might go largely unnoticed, but they’re steps that can validate a market and lead to a breakthrough.

Entrepreneurs are rethinking how products should be built and launched. We now monitor performance in real-time, alongside our customers, tracking feedback and planning future iterations in hours instead of months.

Bringing Disruption Back Down To Earth

As we work through the rest of this blog series over the next several months, there are a number of topics we’ll continue to discuss related to innovation. Perhaps the biggest is that “disruption” is hard. It’s also become ubiquitous for things that, well, might not be so disruptive.

As Kevin Roose pointed out in New York Magazine, “Disruptive” doesn’t always mean “inventive” nor fall within what Clayton Christensen described as “disruptive innovation” in The Innovator’s Dilemma. Christensen’s fundamental assertion is that “technologically straightforward” services and products target the bottom end of an established market, then move their way up until they overtake existing market leaders.

On one hand, that has been a bullet proof concept. The tortoise against the hare. The steady versus the startup. On the other hand, there have been significant changes in the way experimental products enter the market today, targeting anyone who wants to be a user. Developing new products and services in “stealth mode” is a thing of the past. Companies now engage users early on in direct market experiments, rather than surprising competitors with a finished product and pushing it out with a media blitz.

It’s important in this discussion to keep in mind that technology and innovation can equate to invention. Coupled with entrepreneurship, they can lead to massive disruption. Not always, of course. Not every innovation is going to be massively disruptive. But, if our own businesses and services are to remain relevant and avoid the fate that Downes and Nunes foretell, we must continually innovate and disrupt in our own markets.

In this series of articles on TIDE, we’ll explore each of these topics – Technology, Innovation, Disruption and Entrepreneurship – in more detail. Next up is “Technology and its role in TIDE.”

Please feel free to join the discussion. We’d love to hear your thoughts on our past, present and future.

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