3 Myths about Digital Disruption
WHAT IS DIGITAL DISRUPTION?
The digitalization and spread of technologies will have implications for businesses, both positive and negative. These technologies challenge the status quo and present opportunities for improved efficiency and new and innovative business models. For example, print media suffered in the face of digital advertising giants like Facebook and Google, while taxi companies lost revenue when Uber came on the scene. These markets have been disrupted by the introduction of new technologies.
We’ve all read the headlines “Digital Disruption has only just begun”; “Beyond Brexit: Digital Disruption is the bigger threat”; “Digital Disruption now has the potential to reshape markets faster than perhaps any force in history”. While it’s true that your business model will likely need some adjusting in the face of digitalization, it’s not all doom-and-gloom. There’s no denying that digitalization will affect businesses across all sectors, but there are a few myths that should be debunked about digital disruption.
“Value comes from seeing what customers need and delivering it. Digital disruptors will do all of this at lower cost, with faster development times, and with greater impact on the customer experience than anything that came before” – James McQuivey, Digital Disruption: Unleashing the Next Wave of Innovation
MYTH #1 IN DIGITAL DISRUPTION, WINNER TAKES ALL
One of the points often made when discussing digital disruption is that new technologies will render traditional business models obsolete. I would argue that while this may have been true in some cases, it’s also possible for both digital and traditional businesses to co-exist. This has been true in the case of higher education. Despite the explosion in the availability of online courses, the number of full-time students on Canadian campuses has more than doubled since 1980, and the number of part-time students has increased by 16 per cent. Online courses did not replace traditional post-secondary education; rather both have seen increased success.
MYTH #2 DISRUPTION HITS LIKE A BRICK WALL
It may seem like Netflix appeared overnight, bankrupting movie rental stores like Blockbuster in the blink of an eye. But Netflix came on the scene in 1999, more than a decade before Blockbuster declared bankruptcy in 2010. During this time, Netflix slowly altered its business model in response to its customers, gradually becoming the multi-billion dollar company it is today. To avoid Blockbuster’s fate, keep an eye on any changes to the edges of your core business and adjust accordingly.
MYTH #3 YOU’RE ONE IDEA AWAY FROM CURBING DISRUPTION
Similarly, while disruption will not likely happen overnight, succeeding in the face of disruption is an iterative process. With the current pace of disruption, it can be easy to feel like you’re one idea away from the answer. It can therefore be discouraging when your first idea for a new business model is a flop. Don’t be afraid to fail – your first ideas may not work. Be willing to go back to the drawing board and be persistent.
Although your business will likely be impacted by digital disruption, not all impacts will be negative. As we’ve seen, some traditional businesses have thrived in the face of disruption. And the changes will likely occur over a prolonged period of time, allowing you to trial various strategies to mitigate the impacts of digital disruption. In addition, remember that there’s no one solution to the challenges presented by digital disruption; it will affect different businesses in different ways. Be mindful of this and remember that at the end of the day, it’s all about being in tune with the needs of your customers. Staying in tune with your customers and keeping a close eye on the impacts of digital technologies on your business and its competitors will bode well for the future of your company.
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“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change” – Charles Darwin