Anna Frazzetto's Blog

Digital Innovations and Technology Solutions

It's Not the Disruption that Matters, It's How You Handle It

Three Tips for Staying Ahead of Disruption

This spring the Harvey Nash CIO survey revealed how heavily digital disruption is weighing on the minds of CIOs worldwide. According to the survey of more than 3,500 IT leaders, 66 percent of CIOs report that digital disruption [change resulting from digital technologies that disrupt established business models] is driving significant change across their businesses. With today's constant business case reminders of old models (bookstores and taxis) being wiped away by upstarts (Amazon and Uber), it's not surprising that IT leaders are on the lookout for disruptive challengers. Will we be next? Are we as vulnerable as music stores and Kodak--companies that saw their physical products dissipate into computer bytes and mobile technologies?

Here's my question: Is disruption anything new?

Having been in the technology industry for many years, I have seen digital disruption again and again. Prior to the new millennium, companies like Monster and CareerBuilder were disrupting the world of recruiting and staffing--changing how and where people find jobs. That disruption continues today as Monster and its cohorts now face competitors like LinkedIn's Talent Solutions. Suddenly a former disruptor faces disruption. 
In the last five to seven years, the news and media industries have seen many publications shut down or reduced drastically to compete with powerful disruption from the Internet media players. They have had to rethink and rebuild their content products for a digital age and mobile devices, but it is working. Consider this excerpt from The Economist: "After years of wreaking havoc, the Internet is helping media companies to grow. PricewaterhouseCoopers (PWC), a professional-services firm, reckons that revenues for online media and entertainment will increase by around 13% a year for the next five years." ("Counting the Change," The Economist, April 2013).

Disruption in business, even digital disruption, is nothing new. Just ask IBM and Microsoft. In years past we might have simply called it "market shifts" or "innovation." What is different--other than the name--is speed. The "digital" side of digital disruption allows change to come faster than ever as a global and tech-driven marketplace fuels greater competition and rapid information dissemination. Change is no longer approaching from a distant horizon. Today it is always knocking on the door and CIOs and their technology teams have to be ready to answer.

How to Keep Ahead of Disruption: Three Tips

I am very lucky to have a job in which I get to see a variety of global technology, media and financial businesses and their leaders facing the challenges and opportunities of digital disruption each day. The C-leaders who do it best know and follow these three guidelines.

1. Be an Entrepreneur, Always
Big or small, the very best businesses have the ability to think and react like entrepreneurs. They aren't afraid to change strategies or try new paths. Consider how Hearst Magazines evolved from a publishing house to a "diversified media and information company" as the Internet and mobile technologies reshaped how people consume media. Rather than clinging to one model, Hearst expanded its content expertise into new realms and has grown in a time when publishing has shrunk.

2. Know Your Strengths and Advantages
A new approach or model does not negate your business and all it has done. There is a legacy of knowledge, service, excellence, resources, talent and history within your business. The best businesses and leaders know exactly where the company's strengths and advantages lie, making the organization and its people better equipped to adapt when markets and models shift. IBM could have packed it in with all the disruptions that changed the computing industry, but it didn't. IBM changed its model, leveraging its technology strengths and resources to become one of the world's leading business services providers.

3. Be the Disruptor
Disruptors do not hold the patent on disruption. For example, Amazon's meteoric growth disrupted many retail business models along the way. Now the Chinese Internet retail giant, Alibaba, has a very different profit model (advertising and premium services) that may well disrupt Amazon's margin-driven retail model. The lesson here is that disruption works both ways. Look for opportunities to disrupt and change accepted models, no matter how new or unstoppable they seem.

Remember, disruption is nothing new in business but the speed of digital disruption is remarkable. It's the speed of disruption that can make a business feel uncomfortable and vulnerable, but only if you let it. So think entrepreneurially, know your strengths and embrace disruption. You'll adjust to the speed.