What exponential disruption can teach us about transformation

When I take a moment to step back and look at what is happening in the business world today, it seems to me that ‘exponential disruption’ may be an understatement. Every day I read either of an established, respected industry giant falling into administration, or of a new start up suddenly worth billions on the stock exchange.

And there is less and less room for the ‘steady as she goes’ companies that sit between these two extremes. If you are not actively disrupting your industry (or someone else’s), firstly why not – but more importantly, you may already be a casualty of your competitors.

So what has caused this incredible change of pace?

Unsurprisingly, technology sits front and centre, delivering layer upon layer of revolution and evolution in a way that is impacting the commercial landscape like nothing before it. 

Never has it been so cheap to run a business so well.  Opensource software, cloud-based infrastructure, the falling price of hardware, and – through social media channels – the highly democratised nature of marketing mean that, these days, companies don’t need a huge Capex investment to set themselves up.

Next there is the sheer volume of data and information that is now freely available at our fingertips. This has led to significant industry disruption, as content and information that used to be a cost has become free

and it has facilitated start-ups. Understanding and predicting the market used to be very expensive; now predictions are far more affordable and accurate, because of the breadth and wealth of information available. 

Finally, there is the way that disparate technologies are converging to create their own breakthroughs. The smartphone is a great example. What started as a combination of some key legacy technologies – has rapidly become the dominant technology platform, essential in everyday life and offering all sorts of capabilities . 

It seems the scales are firmly weighted against the legacy firms, yet there is little preventing them from exploiting these same advantages – indeed they have faster access to expertise and cash so can invest sooner.

It isn’t that simple, of course. They have a number of weighty responsibilities to meet, including pleasing risk-averse investors, but the reality is that the market is changing rapidly: competition is fiercer, customer tastes are more fluid and the speed at which businesses can fail has accelerated. Innovation is key to survival.

There’s a number of steps that I think these legacy companies can take to focus on their own transformations. You can read about them in the full version of this article here.