Managing Digital Disruption: 4 Core Strategies

Disruption is inevitable, whether we like it or not. I remember the first time I saw a commercial for text messaging. I was initially put off by the idea; but I was also intrigued. Fast forward about 25 years and text messaging has completely transformed how we communicate. Today, digital disruption is forcing more of these fundamental shifts, faster, and businesses that aren’t on board are getting left behind. These disruptions are no longer optional, they’re essential, and keeping pace is a relentless undertaking.

Digital influence affects every facet of a business – customer experiences and perceptions, employee productivity and invention, and the ability to do business at scale and outpace competitors.

So, what’s an organization to do?

There are many, many pathways to consider, but experts agree on a few basic principles across the board. So, let’s talk about some of these strategies to manage and facilitate digital disruption.

Start with a Focus on Culture

To stimulate and better manage disruptive practices, you need a team that is fundamentally structured for it. Without the right culture, the technical pieces may still come together, but they’ll never be fully realized towards managing digital disruption.

Digitally mature businesses excel not because the CEO mandates something or because the business adopts a technology mindlessly. They excel because they have a culture built with disruption in mind. The culture supports these types of characteristics:

• Agility
• Experimentation
• Continuous learning
• Collaborative efforts
• Accepting the risk of failure
• Cross-functional teams organizing as one

When the culture, not the technology, acts as the means to drive change, the benefits have more staying power. Teams that work outside a narrow definition of their roles can use layered skillsets to achieve a common goal. Combining technologically skilled employees with those more adept at customer experience and design invents solutions that would otherwise be unimagined.

When a team goes into a project with decision-making authority and an expectation of risk, they’re more agile towards digitally disruptive solutions. If you’re adding on to your team, keep these cross-functional capabilities in mind as you hire. To maximize the disruptive power of an existing team, get them in the mindset of experimentation and quick fails. Digital disruption is an opportunity, but it requires some trialling, so teams should be prepared to fail fast and try again.

First Customers, Then Technology

Once you have teams poised for digital disruption, your next focus should be to establish customer-centric goals for that disruption. Why? Because while technology tools are important, the objective of your digital disruption still has to do with the customer at the end of the day. They are your revenue and your longevity, so the initiatives you tackle first should create more value for them. It’s your job to realize what they need before they know they need it. The value you create can be driven in three ways:

1. Cost Value: Offering customers lower costs or other economic benefits

Ex: Tesla is a high-profile disruptor, but it wasn’t until they lowered the cost of their Model 3 to $35,000 that they began competing with a wider range of automakers. Lowering the cost opened them up to a larger customer base. They priced at a loss to pay for the long-term scalability and market share to deepen disruption.

1. Experience Value: Offering customers a better experience than competitors

Ex: Starbucks sells coffee. So do a lot of other companies. Starbucks’ success isn’t because they have superior coffee compared to everyone else, it’s because they’ve built a superior, unique customer experience beyond that coffee.

1. Platform Value: Competing by creating network effects that benefit customers

Ex: Netflix created its own platform for customers to stream movies and television, which made it more convenient for customers to access the media they wanted to see and drove the digital disruption among competitors. 

The strongest digital disruptors provide not one, but all three of these values, making their impact much more potent. Offering cost value shrinks the market size and eliminates competition. Then, when you combine it with a great experience and a supporting platform, you establish a new normal for customers. As customers demand this new normal, your competitors are forced to adapt.

Take Advantage of Underused Assets

Massive digital disruption undertakings can be exciting, but they also require a lot of testing and resources – and that can be downright scary. A smart way to begin digital disruption is to look at what you already have.

Which assets are being underutilized?

Disruption opportunities can be found in many pockets of the business. For example, adopting cloud computing to boost processing power and free up your programmers for other collaborations. What innovations could they now experiment with using this new free time?

Assets can be more than just physical, too. Proprietary information, data, and specialized expertise are also examples of potentially underused assets. For instance, a surgery center focused specifically on Lasik is applying their expertise as a specialized asset. Uncovering the most profitable approach to these underused assets may take time, but as you go through that process, you’ll also unearth assets that may be holding you back or costing you more than they’re worth. Remove the assets that aren’t benefitting you or differentiating you from competitors to build a stronger momentum for digital disruption.

Integrate the Right Tools

Systems that provide “just enough” functionality aren’t going to help you with digital disruption. To innovate, you need solutions that are not only cutting-edge, but also leveraged effectively. The technology supporting your digital disruption should streamline processes, track key metrics, speed up delivery times, and boost the overall power of your offerings without over-complicating things. If a solution isn’t serving these needs and/or its uses cannot be accelerated through tactical integration, it may be time to say farewell.

So, the technology aspect is two-fold: get the RIGHT technologies in place, and then maximize the capabilities of those technologies with the RIGHT integrations.

This harkens back to the earlier point about teams being able to collaborate. Data is power. The ability to share data is of benefit to everyone in the organization, and it’s a major contributor to the ability to collaborate, learn, and share disruptive ideas. Cloud-based solutions are a great resource towards this end because they make it convenient for all parties to leverage the information no matter where they are. Discovering whether your tools and serving you and uncovering which tools could benefit from integration should occur naturally as teams communicate on disruptive concepts and customer experiences are evaluated to set the initiatives you want to pursue. In these moments you may have your lightbulb moment of realizing, “Hey, now that we have this customer-centric goal, it’s become pretty clear that our current setup isn’t going to support that. What’s our next move?”

Opportunities for digital disruption are all around, and they’re always evolving. How you go about disrupting is your choice, but by adopting the right culture for disruption, customer-centric initiatives, and smart investments in your assets and toolsets, you can turn your most imaginative ideas into concrete realities.