The other side of Disruptive Technologies – Who suffers?

The other side of Disruptive Technologies – Who suffers?

Mercury is rising and so is the heat of technology market. Quite arguably one of the most misunderstood terms in the business world is ‘Disruptive technology’. While this term may still come as a new one for some, it should be know that there was a time when the word “disruptive” was being considered as a paradigm shift. Everybody talks about how a particular technology turned out to be disruptive and game change and how it changed people’s lives for the better. What we shall talk about today is the impact of such technologies on ones they replaced, the ones left stranded.

Word Definition :

“A disruptive innovation is a technological innovation, product, or service that eventually overturns the existing dominant technology or product in the market”.

More precisely, it can be understood as an innovation that disrupts an existing market. Disruptive innovation improves products and services in a way that the market does not expect, typically by increasing revenue, reducing costs, transforming business processes or realigning strategies for a different set of customers or their expectations.

Harvard’s Clayton Christensen Doctrines “Disruptive Technology”

Many companies also assume that “disruptive” connotes a highly-refined, high-end product with new wave technology. In his trendsetting book on business innovation, ‘The Innovator’s Dilemma’, Harvard’s Clayton Christensen mentioned repeatedly that disruptive technologies were exactly those that did not appeal to entrenched market leaders as they tended to underperform existing technologies and served a less-profitable consumer demographics. Clayton Christensen theory also made an observation that such technologies tend to get better at a faster rate than the increasing need of users.

Fallout of Business:

Blockbuster. Nokia. Kodak. Most businesspeople do not know what they have in common. They are all those enterprises which were on the wrong end of the impact of disruptive technologies.

My immersion in this topic awarded me to reach to two such visions. First, is that disruption is a devilishly smoking hot research topic. Second, there are plenty of very powerful and affordably implementable measures available which enterprises can take into consideration to avoid the mishap of some giants of the yesteryears suffered and disappeared from the market such as the ones mentioned above.

When disruptive technologies fail to deliver, these market leaders are forced to rule them aside. This is very much visible by seeing Kodak’s failure to embrace digital camera technology and newspapers’ early dismissal of blogging platforms.

“A true disruptive technology not only changes the way people think, but also the way they operate”

 

Disruptive Technologies Caused Disruptions:

We ought to believe that Disruptive Innovations change the rule of the game. While the process of true disruption the ideation or the innovation must radically change or alter its environment, mere improvements, additions, enhancements or modifications do not count.

  • 1. Downloadable Music/MP3/iPod: When was the last time you visited a Music Store or ordered a physical CD Online? I guess this would be the talk of the town back in yesteryears. Downloadable music and mp3 have changed the dynamics of listening to music. The rules were altered. These downloadable music have knocked down the business of physical music stores. Large cassette manufacturing corporate houses like Sony, Panasonic, Teac, HMV, WSJ, Universal Music, Eros Entertainment, Phat Phish have suffered huge losses because of these downloadable music available online. Some just surrendered and disappeared.
    Music stores were left heart-broken, consumers no longer tethered with bulky portable devices and therefore Music Industry faced an ugly setback. In this queue, reel recording are also added. In addition to this of course the gramophone, tape recorders, stereos and music Walkman tapes soon were considered more of vintage. Manufactures and music collaborations like Billboard and Garrad have managed themselves to survive these waves. Though not still manufacturing gramophones, but still submerging themselves in music genre.
  • 2. Digital Photography: Oh! My one picture got wasted :-( When was the last time you heard your mother saying this? The days of the 24 hour photo store and carrying rolls of film on vacation seems Stone Age ideas. Digital picture-taking makes photography simpler. It allows consumers to take far more pictures and this has increased the odds of capturing the perfect shot. This was disruptive. All this put to bed the industry of photographic films, dark room jobs, and negative reels. We need not be totally unaware of the misfortune of large corporations such as Fuji Films and Edisons. There was a time when out of photo films and reel they were cashing in millions but Digital Photography has now replaced them all. Again, how can we forget all those engineers, technicians and other technical people who used to be doing their best for the Film and Production market? So many jobs gone, so many gaps.
  • 3. Emails and Digitization: When was the last time you wrote a letter, stamped the envelope and post it to your friend? Emailing is a cheaper and faster way of getting connected with people. People adopted them as they were quite easy than hand written letters in lot of ways. Hitting a send button takes much less effort than stamping and mailing a letter. Such disruptive technology has caused major disruptions to postal industry, paper manufactures and definitely ink making companies.
    Electronic, internet-savvy and digitized world have bashed down many incorporations including government agencies. The unpleasant result has been seen throughout the world. Even the smallest government enterprise is transforming their most important or general public notice using e-way. Our government has also digitized their pattern of working and therefore less government staff is required in offices. The agencies and institutions are getting digitalized. The day is not far when a secure enough system is built so that we can e-vote in next elections from our homes! Fear is who all shall suffer.
  • 4. Social Media: Social networking sites like Facebook, Google+, Tumblr, LinkedIn and Twitter have made it a lot difficult for the Telecom Industry. People now do not bother to make a call using SIM of their cell phones or use SMS facility of their phone, instead they prefer various medium of call service providers like Skype, Viber, Whatsapp and many in list. Users are finding such social networking platforms very much useful as they can post text as their statuses, can share links, images or videos that are either accessible by anyone with access to the site or only to private groups of friends. These Social Networking sites have made the world smaller.
  • 5. E-bloggers and E-Newspapers: Social networking is reportedly also affecting journalism. We prefer reading news headlines on our smartphones, therefore utilize our time-in-between our next meeting scheduled with client. Everyday citizens are posting eyewitness accounts of an event and therefore newspaper organizations have started competing themselves against bloggers and amateur journalists on Twitters and Facebook.
  • 6. Streaming Media Services: Michael Powell, the head of the National Cable & Telecommunications Association, in year 2013 stated that Netflix was the largest subscription video provider in the U.S. Netflix is also credited with driving video rental giant Blockbuster to bankruptcy and then closure. There are major streaming sites which include Hulu and Amazon Instant Video; video sharing site YouTube and Redbox offer both online streaming and DVD rentals at special vending-machine-like kiosks.
  • 7. E-books and E-Magazines: E-readers like the Amazon Kindle, Stanza and Apple’s iBooks allow you to download and read complete book, newspapers, magazines and comics. Some e-books even allow you to bypass downloads and read your books on cloud. So, such e-books are taking the blame of disrupting the paper books industry. The tragic downfall has been seen by the publishing and printing houses presenting a lot of good read for people in mediums such as magazines, books and journals, newsletters etc. No more ‘waiting’ to get your hands on the next weekly digest, bi-monthly or fort-nightly subscription magazines of your favourite genre. The bed time stories have been replaced by e-books and smartphone online games. I would not hesitate in saying it has not only affected the publishing firms but has also come as a challenge to adopt to these new parental ways for our generation.
  • 8. Mobile Payment Options: Nielsen survey released in January 2014 explains that around 54 percent of people around the world and 71 percent in North America prefer plastic to cash for their daily spending. Myriad Mobile apps and services are coming along to disrupt the traditional cash register. We are now more willing to make online purchases using credit and debit cards which even includes shopping via smartphones and tablets.
  • 9. Self-checkout Stations: From the sources of Bureau of Labor Statistics, Thibodeau, the self-checkout process leads to job losses for some of the millions of cashiers in the U.S. and there were around 3 million in 2013. Such issues arise whenever something is automated. Many people prefer to deal with a human being, although some people prefer self-checkout. Another disadvantage of self-checkout is the greater risk of theft.
“Smart technologies are not just disruptive, they can also preserve the status quo. Revolutionary is theory, they are often reactionary in practice.”

 

Responding To Disruptive Technology:

Disruptive technologies can come for any of us. One needs to stay prepared and vigilant for combating the risks associated with such volatile technology changes. I have been exploring questions like How much it is important to determine whether the technology is disruptive or sustaining? Throughout my research and learning phase I discovered that organizations that failed to respond appropriately to technology and have collapsed for probably either of the two reasons – procrastination or stubbornness.

Some from the list of such companies are Honeywell, Prime, Kodak, Lucent, Polaroid, Nortel, Compaq, Gateway, Tower Records, Control Data, Lotus, Borders, Digital Equipment Corp., Ashton Tate, Borland, Novell, Nokia, Barnes & Noble, and Blockbuster. These companies fail to respond aptly to the Disruptive Technologies.

When a disruptive technology appears on the horizon of your industry, you need to ask a few question yourself,

  • 1. How open-minded to new ways are you as a Company Leader?
  • 2. What is the ideation of your executive management team? How willing are you to listen to the incoming voice of Disruptive Technology?
  • 3. Entrepreneurs must introspect whether they have the right leadership ability to deal with an era of disruptive technologies or not?

Keep Reading!! Keep Toying With Technologies :-) But Don’t Just Get Caught Up In The Disruptive Whirlwind!!

Though my personal advice is that instead of preparing for the next disruptive technology to replace and affect your interests, why not be a part of the innovation of the next disruptive technology yourself!

References:
http://www.entrepreneur.com/article/235072
http://www.cnbc.com/id/102521238
http://goo.gl/FEI4UA
http://www.computerworld.com/article/2849847/disruptive-technology-dead-companies-do-tell-tales.html
https://hbr.org/1995/01/disruptive-technologies-catching-the-wave
http://venturebeat.com/2010/04/21/an-argument-against-disruptive-technologies/
http://bigthink.com/endless-innovation/disruptive-innovations-always-look-like-toys
http://www.pardonthedisruption.com/2007/03/01/what-is-disruptive-innovation/
http://marymao.weebly.com/uploads/1/3/5/5/1355774/summary.pdf
http://group4projectinnovationaua2011.wikispaces.com/Advantages,+Disadvantages+and+Conclusion

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Ajeet Singh

Ajeet Singh

Co-Founder & Director, Business Management
Ajeet is responsible for driving sales, forging strategic partnerships and managing key Client relationships in the United States and Canada. In the past, Ajeet has held consulting roles with various global technology leaders, such as Globallogic & HSBC in India.
Ajeet Singh

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Ajeet SinghThe other side of Disruptive Technologies – Who suffers?