Disruption is all around us. From changes in the business world to shifts in educational models, disruptors have been challenging traditional methods and re-writing the rules across industries and economies for centuries.
But disruption doesn’t derive solely from business or technological advancements. Shifts in globalisation, demographics, and industrial trends also influence and cause disruption. These forces evolve over time in successive waves and create new megatrends that pave the way of the future.
It’s obvious the effects of disruption are beginning to extend far beyond the business world, and despite growing awareness to disruptive change, only a handful of companies and sharing economy startups have successfully disrupted their own regulatory frameworks.
Netflix, for example, first introduced its services to the world as a DVD home delivery service and then transformed its business model to provide customers with a streaming platform. Now one of the most powerful companies in entertainment, Netflix is a multibillion dollar business that has changed the way consumers access movies and television in the era of the internet, consequently pushing video rental companies such as Blockbuster out of the market.
Co-author of The Other Side of Innovationand professor at Dartmouth College’s Tuck School of Business Vijay Govindarajan says ‘legacy investments create a legacy mindset’ meaning: companies who don’t modify and adapt their business models will be stuck in their comfort zones and are ultimately left behind when disruption hits. Professor Govindarajan says Blockbuster’s cardinal sin was maintaining its commitment to a vast retail network, even when that was no longer the way movie renters wanted to shop.
But what exactly are the root causes of disruption and how can we gain the upper hand? By understanding the next waves of disruption and the connections between them – whether they’re technological, physical or social fluctuations – businesses can only survive if they have a high tolerance to inevitable shocks and can recover and adapt to disruptive events.
Our nation’s continuing economic prosperity and social wellbeing will depend on securing competitive advantage in the technology-driven future where disruptive automation and innovation will transform every aspect of life and business, according to Australia’s Innovation System Futurereport by the Department of Industry, Innovation and Science.
So how can players in business stay ahead of an everchanging game? Ultimately, businesses who embrace the innovative possibilities of powerful new digital ecosystems will thrive in this new era of disruptive change.
A report by the University of Sydney Business School and Capgemini Australia, Digital Disruptive Intermediaries, looks at the ways in which new operators are exploiting digital information to disrupt the Australian business landscape by challenging established models and changing the way that value is created or distributed.
The report shows that disruptive organisations take a unique approach to a longstanding problem within their industry, creating newfound solutions which often propel innovation and transforms them into industry disrupters. For example, taxis were first invented and started operating in 1897 and have since been utilised by millions of customers – that is until Uber’s arrival.
Uber’s digital offerings have reorganised the allocation of services to customers in groundbreaking ways, consequently disrupting existing market allocation mechanisms that traditional businesses in the hospitality or transport sectors are used to working with.
On one hand, the ride sharing and food delivery platform has taken customers away from using traditional methods of travel and delivery service, on the other hand, it has created more jobs than it has destroyed and has ultimately expanded self-employment avenues for drivers.
These revolutions and disruptions are a key component to business success – it only takes one great idea to shake up an entire industry. But how can disruption constantly be achieved throughout the life of a business? The answer is innovation.
Without constant innovation businesses become stagnant and are eventually left behind the competition. Enterprises that are focused on preserving the status quo and fail to innovate will likely be forgotten, dimmed by companies who shine from unlocked levels of revolution and services fit for the modern age.
For more on innovation tune in to episode 4 of new SBS podcast, The Few Who Do – two hosts, one problem, two possibilities.