Business is changing, and the call from the big winners is that the world needs revolution, not evolution, in order to get ahead.
The term digital disruption is one of those catchphrases that gets thrown around quite a lot these days – and for very good reason… and that’s because it has become the basis of a number of the very best business models and inventions we’ve seen over the past few years.
Indeed, it’s become so pervasively used, that in one of his first public statements after becoming Australian Prime Minister, Malcolm Turnbull had a lot to say about disruption – and how he believes Australia shouldn’t be fearful of it.
“The Australia of the future has to be a nation that is agile, that is innovative, that is creative. We can’t be defensive, we can’t future-proof ourselves,” Turnbull said. “We have to recognise that the disruption that we see driven by technology, the volatility in change is our friend if we are agile and smart enough to take advantage of it.”
Granted, he was talking shortly after one of the largest disruptions to Australian politics of recent years – he had just toppled Tony Abbott out of the top job – but it does paint a picture of disruption.
It’s largely been seen as a highly negative word – but times are changing, and disruption is at the forefront of innovation and change throughout Australia, and the world.
So… what is it?
That’s the million dollar (or billion dollar, potentially) question: What is digital disruption and what does it mean for business?
Beth Webster, Director of the Centre for Transformative Innovation at the Swinburne University of Technology, explained it well when she wrote about digital disruption, and questioned how deeply digital technologies are penetrating industry.
Beth drew the analogy between digital technologies and electricity – pointing out “electricity was generally ‘known’ about in the late 18th century, but it wasn’t until the 1870s that a practical electric motor was constructed and then the early 20th century until connection to the electric grid was commonplace for households and general industry”.
She goes on to say that electricity is an “enabling technology” – it exists, but at the beginning, no one was quite sure how to harness it, so practical ways of using it had to be dreamed up.
In the early days, there were some wild and wacky ideas – of course – but over time, as more and more people got their heads around the potential of electricity, a clear way forward was figured out… and now electricity is in virtually every home and business in the country.
Fast forward to the ‘digital age’ – from the time the internet was born, people have been trying to figure out the best way to use it. And – much like the early days of electricity – there have been some pretty crazy suggestions on how the power of the internet can be harnessed, especially for business.
But, pretty soon, it became apparent that a lot of the early technologies that people thought would be fundamental to the operation of the internet – things like newsgroups and IRC chat channels – were very quickly being surpassed by other groundbreaking ideas.
When Sir Tim Berners-Lee invented the World Wide Web, life as we all know it changed forever – and in doing so, Sir Tim became one of the very first ‘digital disruptors’.
Revolution, not evolution
The key to digital disruption is to understand that it’s not simply evolving your business, or taking an existing product and ‘putting a clock on it’, as many so-called inventions are.
The truly disruptive ideas are the ones that create an entirely new market for themselves – or challenge an existing industry to the point where the establishment either has to fight to stay relevant, or simply get out of the way.
The classic example of this is Uber, the ride-sharing service that has delivered a massive shake up to the taxi industry worldwide.
Clayton Christensen, the man who coined the phrase ‘disruptive technology’ in the Harvard Business Review in 1995, has argued that Uber isn’t – by his definition – a disruptive technology.
When Uber first kicked off, it was tiny, inefficient and – technically – operating well outside of the government regulations that cover the taxi industry. Rides cost more than a normal taxi, the wait times for drivers was much longer and all up, it looked like it might not be that much of a contest between Uber and the taxi companies.
But then Uber launched UberX – and the game changed completely. Driver lists grew, costs came down, fares became cheaper and the rating system (for both drivers and passengers) became a means by which the company could consistently improve the quality of the service for both passengers, and drivers.
What we learn from this is that Uber, as a basic ride-sharing idea, was good – but what really kicked it over the top was the platform that underpins in, which was delivered in the guise of UberX.
It’s not just the little guys
One of the more common mistakes that people make when they talk or think about distruption in business, is that it’s a ‘David taking on Goliath’ scenario every time.
But one of the key things to remember is that virtually any business, big or small, can disrupt the status quo – even within their own organisations.
Perhaps the best example of this happening was when Apple – a company that had made its fortune building computers and laptops – launched the iPhone in 2007, and fundamentally changed the way Apple did business, and the way the world used their mobile phones.
The iPhone very quickly went from being an add-on to Apple’s arsenal of goods, to lying at the very core of the company’s business model. iPhone sales helped to build Apple into one of the biggest companies on the planet – and Apple helped make that happen by integrating a lot of the functionality of the handset, and its computers.
In short, much like Uber, it was Apple’s platform of integration that helped make it the outrageously huge success story that it is today.
It’s all about platforms
There’s a famous line in the 1989 Kevin Costner film Field of Dreams – which has been misquoted often enough that the ‘newer version’ of the line has effectively become the quote.
“If you build it, they will come” has become a common mantra in business – normally used by companies that don’t really understand what they’re doing, or are trying to get people to use a service that doesn’t really need to exist.
For example, there would be very little to gain for a company trying to build a new Facebook – because Facebook is already there, and no one needs another one.
So the key to it all is to provide a new platform, which is a big, radical step away from the entrenched business models and provides a whole new way of doing things.
One Australian company that is doing just that is Netthq (Netthq.com), a Sydney-based organisation that has put together a platform that is set to change the way the world does business.
The team at Netthq have spent years working in the tech industry – and years finding workaround solutions to the issues that plague the way business gets done.
The vast majority of companies rely on email, which is simple and effective – but also riddled with inefficiencies and problems for both employees, and employers.
When someone changes roles within a company, or takes a job with a new company, there is upheaval as their clients and contacts struggle to figure out who they’re now meant to be talking to – which leads to a massive loss of productivity.
Likewise, Netthq noticed that a lot of the basic functionality of business communication was scattered across a wide variety of platforms – with staff switching in and out of different programs and applications, just to get their day-to-day work done, while struggling to stay in touch with their team, their customers and their suppliers.
That’s why the team at Netthq have developed their new platform – and why they’re setting out with the express intention of disrupting the way businesses communicate with each other, and with themselves.
The solution, they believe, is a platform that handles all of the communications, and manages the increasingly complex network of business contacts – all while retaining business continuity for managers, staff and clients.
Netthq is still in its early days, but it is gaining traction in the business world – and earning itself a reputation as one of the most powerful, digitally disruptive innovations to come out of Australia in recent years.
So maybe Malcolm Turnbull was right when he spoke about embracing disruption – and maybe it is time that Australian businesses stopped shying away from change and started to really understand that ‘disruption’ isn’t a bad word.
Some of the biggest names in business have gotten to where they are by changing the way they do business – and there’s a lesson in that for any business owner, big or small.