Innovating in a Forever Recession Part 2

The concept of “Forever recession”, photo Dinis Guarda

Disruptive technologies creating new businesses 

In the second article of Innovating in a Forever recession the focus is on the disruption created by new technologies and the business and corporate challenges related with that. Businesses need to collaborate and innovation is now about a sound need to share and collaborate.

“The collaboration landscape is no longer about isolated groups of people that work together to complete a specific job. Today, enterprise collaboration extends more broadly across the organization, encouraging partnerships across teams that might not have previously worked together. What’s the reason behind this shift?

It stems from social technologies across the workforce, converting companies from a “need to know” environment to a “need to share” culture that promotes an open collaboration approach, where sharing is the norm and information control is at the discretion of the individual.”  Rob Koplowitz in How Social Technologies Can Kick-start Innovation

Disruptive technologies reconfigure old businesses and create new ones. This capability for change can be found within big or small international professional groups of experts that drive to exchange findings and ideas. Examples of this include how Bill Gates invested in Apple when it was not in its best days, and how Apple and Google have shared members of their boards. Companies such as Facebook, Google, Amazon, Twitter, IBM, and Microsoft rely on networks of evangelical developers, engineers, and IT teams around the world advocating and developing solutions and products.

In addition, firms are starting to use internal social networking tools, such as Yammer and Chatter, to encourage collaboration, discover talent and cut down on pointless e-mails. Youngsters are happy to embrace it, but older managers may be less keen. The use of social media within companies has been disrupting traditional management techniques, particularly in strongly hierarchical firms.

The main innovation drivers are based upon open collaboration practices, and even competitors or rivals sometimes have to share intelligence and industry standards. Social technologies are key to a sound platform for innovative action. However, any sustainable social technology adoption needs to be accompanied by a solid strategy and business change management set up. It is imperative that this process has a solid focus and down to earth insight about a given industry, its goals and its core community.

Trends for transformation by Brian Solis

Disruptive Innovation and the relation with Disruptive technology.

“The theory of disruptive innovation, introduced in these pages in 1995, has proved to be a powerful way of thinking about innovation-driven growth. Many leaders of small, entrepreneurial companies praise it as their guiding star; so do many executives at large, well-established organizations, including Intel, Southern New Hampshire University, and

Unfortunately, disruption theory is in danger of becoming a victim of its own success. Despite broad dissemination, the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied. Furthermore, essential refinements in the theory over the past 20 years appear to have been overshadowed by the popularity of the initial formulation. As a result, the theory is sometimes criticized for shortcomings that have already been addressed.

There’s another troubling concern: In our experience, too many people who speak of “disruption” have not read a serious book or article on the subject. Too frequently, they use the term loosely to invoke the concept of innovation in support of whatever it is they wish to do. Many researchers, writers, and consultants use “disruptive innovation” to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage.” What Is Disruptive Innovation? by Clayton M. Christensen, Michael E. Raynor, Rory McDonald

The concept of Innovative Innovation, coined by Profess Clayton M Christensen is somehow different from the concept of Disruptive technology. There has been a big discussion around these topics with some authors criticising the model. But the model is very clear and people should be out of trying to change something that is clear to adpat to other ideas and vision.

The success of the concept made it somehow a victim of its own when people try to use it to justify any changes in technology that is changing industries and society. Case of it is the polemic around Uber.

Let’s consider Uber, the much-feted transportation company whose mobile application connects consumers who need rides with drivers who are willing to provide them. Founded in 2009, the company has enjoyed fantastic growth (it operates in hundreds of cities in 60 countries and is still expanding). It has reported tremendous financial success (the most recent funding round implies an enterprise value in the vicinity of $50 billion). And it has spawned a slew of imitators (other start-ups are trying to emulate its “market-making” business model). Uber is clearly transforming the taxi business in the United States. But is it disrupting the taxi business?

According to the theory, the answer is no. Uber’s financial and strategic achievements do not qualify the company as genuinely disruptive—although the company is almost always described that way. Here are two reasons why the label doesn’t fit. What Is Disruptive Innovation? by Clayton M. Christensen, Michael E. Raynor, Rory McDonald

What is critical to consider is that innovation is a shift a bridge over different technologies and somehow an evolution of adaptability and dealing with change, crisis and the continuous recession concept of Seth Godin. Therefore the important thing about Disruptive innovation is that is a theory that helps explain a given moment in tech and innovation change that happened around the 1990s.

At the moment we are accelerating the innovation DNA and disruptive technologies are somehow a new evolution of the concept. As we move towards one world of AI and algorithm driven economy the concept of innovation keeps on changing and somehow the best way to look at innovation is as a capacity to do bridges between behaviour, data and technology evolution.

A world changed by social business technologies, becoming Open

“Open business represents a concept of doing business in a transparent way by intimately integrating an ecosystem of participants, collaborating in public space…Open business structures make contributors and non-contributors visible such that the business benefits are distributed accordingly…They activate personal engagement and productivity by benefiting the contributors and producers that they can live from it and helping the clients to reduce their costs.” Open Business, Wikipedia

The great virtue of social technologies is that they break down the barriers between companies and their customers. This allows firms to gather significant volumes of data and information, and this is therefore the best way available to interact with customers. However this lack of barriers does also open businesses to criticism and to direct confrontation from customers and any person dealing with a brand, product or service.

On arriving here any savvy company realises that needs to be transparent to some degree. The open web is facilitating conversations in an astonishing way. Any company, whether a start-up or the biggest corporation in the industry, now has to regularly monitor social media insights to find out what their customers really think about them, their products, and services. It will also have to evangelise key influential people and could even utilise social media as a platform for launching new products, and services. And there is no doubt that Social Media also allows companies to respond and adapt to customer complaints quickly, and respond with answers and solutions.

More information and data from social media and analytic tools can be useful, but only if companies can understand and interpret it. It is important to remember that users, customers and workers are already overloaded by numbers, stats and reports: 62% say that the quality of what they do is affected in some way because they cannot make sense of the full scope of data they already have, according to Capgemini. This will only get worse: the data deluge is expected to grow more than 40 times by 2020. But of course this will open a lot of opportunities for companies that do manage to navigate through this data deluge.

The value of anything including commodities, as has been the case across history, is largely determined by rarity and reach. The more people that like a specific product, then the less attention influencers will pay to that product if they are in pursuit of the next big thing. The more people you “friend” or even make acquaintances with, the less meaning such connections have. As communication and reach grows ever easier, the important thing is detecting the next big thing, the golden spots of useful information, new products, services, and websites in the howling hurricane of noise and data.

Social technologies are replacing old industries with easier usability and design. Amazon absorbed most of the booking industry because they understood the shift of knowledge, the long tail process, and the new needs of users in the way they read books, faster access to it and without barriers. eBay or Best Buy have been absorbing large amounts of the retail industry because they facilitate access to products and democratised prices. The opportunity is there to fascinate an easier life for customers and users with products or services that create a WOW factor, but that ultimately are useful and faster to adopt, use, learn, and engage with. It is in this space that new companies can innovate and disrupt old business faster than ever.

Have a look at this interesting Social Technologies Infographic (SoTech Infographic V1.0)

As Marc Andreessen states in Why Software Is Eating The World:

“More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defence. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.”


Related articles:

Innovating in a forever recession Part 1 – Defining “Forever Recession”
Innovating in a forever recession Part 3: Why the social media industry is recession-proof