The Speed and Scale of Digital Change: Why it matters and what to do about it
It should be clear to most readers that we are currently living in a time of rapid technological change. The following business theories explain that large established organisations need to evolve significantly and rapidly if they are going to be able to survive.
- Creative Disruption
- Disruptive innovation
- And industry 4.0
Creative Disruption
Schumpeter’s theory of economic development outlines what he calls the process of creative destruction. He argues that business innovation happens in waves or cycles and organisations that fail to innovate will be swept away. He argues that capitalist economies do not operate in a state of equilibrium but in cycles of boom and bust. Within these cycles entrepreneurs introduce innovations (which can be technologies or ways of organising work). Creative disruption occurs when the new ideas become mainstream.
Figure 1
Disruptive Innovation
Disruptive Innovation emerged in the Harvard Business Review in 1995, written by Clayton M Christensen. Disruptive innovation builds on the idea of creative disruption by adding more clarity about how incumbent organisations that fail to keep up with innovation get swept away. The first part of the process is a smaller company with few resources starts to challenge a larger established competitor. At first the incumbent organisation is not concerned as the service or product offered by the smaller competitor is inferior and the large company retains market share. Opportunities for the competitor often exist as large established companies focus on their most profitable customers. However over time the new entrant gains a foothold as they evolve their offering to provide better functionality often at a lower price. Eventually new entrants move upmarket and start to compete and take core customers away from incumbent organisations.
Figure 2
The are numerous examples that support the theories of disruptive innovation and creative disruption. Blockbuster being displaced by Netflix is one, Spotify displacing HMV (and the record industry more generally) is another. Displacement is however not inevitable, avoiding it does however require a bit of advanced planning and thinking. My experience has shown me that most large organisations, both private and public sector are quite complacent. They are too caught up with the day to day to consider the potentially significant changes that would be required to avoid disaster. My perception is also that people working as part of organisations, especially those that have been with them for many years often become institutionalised. They get used to how things get down, and often accept such approaches unquestioningly. Employees also often avoid suggesting change that is more than incremental for fear that it may cause conflict. This is where I come in.
My work has provided me with opportunities to get close enough to many different organisations, in different sectors (public, private and charity) whilst also maintaining sufficient distance to maintain critical objectivity. For example I served on several different public sector boards where I worked alongside senior leaders in health and culture to develop and implement policy. As an academic I helped business leaders apply digital business concepts to their organisations and as a user researcher / consultant I’ve highlighted challenges and opportunities for change.
Academically my research has also been very much related to digital transformation, a concept that informed my PhD research was Industry 4.0.
Industry 4.0
I outline the concept of Industry 4.0 in detail in this recent blog post and so just give a brief summary here. Industry 4.0 often referred to as the 4th industrial revolution is the idea that current trends in computing including artificial intelligence, big data and cloud computing are also part of a single technological shift referred to as industry 4.0. The four different industrial revolutions are illustrated in figure 3
Figure 3
As outlined in more detail in this blog post industry 4.0 academics argue that most organisations that fail to adopt industry 4.0 business models will simply not survive. They will simply be swept away as more efficient organisations replace them. Adopting a 4.0 business model is not just introducing industry 4.0 technologies into existing structures by fundamentally rethinking how organisations can work and deliver value to their customers.
Customer /UX focus
An approach that many organisations are taking as part of their process of digital transformation is to apply user centred design principles to improve customer experience. Over recent years I have worked across many different UX projects, mostly for public sector organisations as a user /UX researcher. In this capacity I applied the research skills I’d gained in academia to help organisations understand their users perspectives better and to think about potential solutions. I applied design thinking and systems thinking tools alongside a wider understanding of business from practice and academia. My work has frequently also included facilitating workshop sessions to guide participants (people from the organisations I was working with) towards understanding and to give them space to collaborate. My facilitation here was informed by my teaching experience and performance background. Giving space for collaboration was a core spart of my approach as it essential for clients to make final decisions. My role is simply to guide them towards making more informed decisions.
Brian Solis in his book “X, The Experience, When Business Meets Design” argues that to address the challenges that most organisations are facing it is necessary to apply design principles such as storyboarding, persona development and journey mapping at a strategic level, to drive business forward. This is necessary he argues as to be successful in the digital world that we live in it is necessary for organisations to be driven by the mission of improving the experience of their customers.
His arguments very much resonate with my world view and the service offer that I can provide. As will be outlined in following blog posts, my expertise brings together a deep understanding of business (both theory and practice) along with the UX design expertise needed to help business leaders solve problems emerging from digital transformation and the challenge of making their organisations truly user centred.
Originally published at http://digitaltim.uk on October 5, 2022.
