Attempts to ignore the seismic shift from business as usual to disruptive digital business models can result in harsh market punishment.
These days, digital disruption isn't simply driving change within the enterprise: It's a destination. For a growing number of companies–the Ubers, Airbnbs and Yerdles of the world–it is unleashing radically different ways to buy, sell and interact. It identifies opportunities and revenues in nooks and crannies that didn't seem to exist only a few years ago. What's more, along the way, all of this is putting traditional companies on notice that business as usual doesn't hack it.
R. Ray Wang, author of the forthcoming book, Disrupting Digital Business: Create an Authentic Experience in the Peer-to-peer Economy (Harvard Business Review Press, May 2015), points out that it's preferable to shift from "disrupted" to "disruptor." Yet, while this concept may seem like just another "duh" moment in an endless stream of "duh" moments, the devil–or perhaps in this case the angel–is in the details. He points out that digital transformation isn't about hiring techies to program awesome apps or finding a few visionaries to scope out the Next Big Thing.
It's bigger than that. "Successful leaders foster a culture of digital DNA and infuse an understanding of what's required to build an organization in the digital age and on a digital scale," Wang wrote. This means finding ways to become disruptive in order to better deliver on an organization's brand promise. Those who ignore the message may find themselves in "survival mode in the fast changing business environment," he points out.
Wang, CEO and principal analyst at Constellation Research, also argues that business models must shift away from a B2B or B2C approach and, instead, embrace a new model: P2P. In this case, the acronym stands for people-to-people networks. Within this environment, success is based on entirely different factors, including authenticity and trust.
CIOs must address this changing environment and incorporate this thinking into just about everything. The good news is that you don't have to be Uber or Airbnb. You don't have to introduce an entirely new and different business model. But you do have to understand that IT is merely a servant for the business and that its mission is to unlock new opportunities and introduce new gains. "Attempts to ignore the seismic shift from business as usual to disruptive digital business models can result in harsh market punishment," he warned.
Wang says that it's critical for CIOs and other leaders to focus on five key areas: becoming transformation focused, relevant, authentic, intention driven and networked. Those who succeed, he concluded, "disrupt digital business before they get disrupted."
Samuel Greengard, a contributor to CIO Insight, writes about business, technology and other topics. His forthcoming book, The Internet of Things (MIT Press), will be released in the spring of 2015.