Certain laws are not only scientific but immutable. One is that whenever we evolve, something must be left behind. Whenever we grow, something must be cast off or replaced. Every action has an equal and opposite reaction. This is true in all realms of life, especially business. You are no doubt aware of the rapid advance of technology and how it’s changing our world, but you may not be aware of just how quickly this is happening and just how drastically it will affect your business. In the words of Warren Munson, citing his book Evolve to Succeed – The Entrepreneur’s Journey: “You may think that your industry is immune to this disruption, but even in a profession such as accountancy the market has been revolutionised by technology.”
What do we mean by disruption? Peter Diamandis, founder of the X Prize Foundation and numerous exponential technology programs, outlined the six-step process, or the ‘Six Ds’, of exponential technology:
- Digitisation
- Deception
- Disruption
- Demonetisation
- Dematerialisation
- Democratisation
This is the process by which new technological leaps completely overhaul the existing paradigm. To get a better understanding of this, let’s look at the example of something as seemingly simple as Google and the Internet. Google has disrupted the information-industry. Firstly, information has become digitised, available online for all. What once had to be stored in a physical location (books in libraries, repositories, museums) now is everywhere where there is a network. Compare this to how difficult information was to pass on even just five years ago. Everything had to be recorded and/or copied by hand (and it was exceptionally difficult to correct mistakes in transcription).
Next, the technology enters the ‘deceptive’ phase where the true potential has not yet been realised. Again, if we think back to the early days of the Internet, you can see we barely scratched the surface of its full utility. Now, virtually all of us in first world, and indeed many third world, countries know how to use it. Next, the technology disrupts existing industries. So, Google has disrupted information because now it has gatekeepers. Anyone can find out virtually anything with the right search parameters. This leads on to dematerialisation (unfortunately, in this instance, the closing of bookshops and libraries) and demonetisation (we no longer need to pay for information because it is free). This is democratisation, putting information in the hands of the people.
Consider how your industry might be being disrupted by this process, and at what stage of disruption you are at. Are you currently in the deceptive phase? Is your industry already being disrupted and are you struggling to compete? Traditional business models are all based on scarcity. Libraries and books and personal development courses exist because information was scarce and passing it on one-to-one a time-consuming process. But Google and the web have made information abundant. We have to re-think an economy based on scarcity with one based on abundance. Uber have capitalised on an abundance of cars, disrupting the taxi business. Netflix have capitalised on an abundance of streaming, under-utilised film and TV programming, and consumers with electronic devices.
If you want to avoid becoming another Kodak, Blockbuster, Blackberry or Toys R Us – businesses that have been dematerialised, replaced and rendered largely irrelevant – you need to perceive what lies ahead for your industry and take steps to ensure that your organisation can evolve to thrive.