For chief information officers and technology leaders who have to remain focused and vigilant on keeping the operations of their enterprise running consistently and efficiently, “disruption” can be seen as the thing that prevents success. And in some cases, that might be true.
But disruption, when embraced as a proactive event, can be used to change the market and competitive positioning by altering what you do and how you do it. So, disruption in the enterprise technology world can range from being disrupted, to being the disruptor, to setting up a system or platform to strengthen disruption capability.
Let’s look at four questions that can help entrepreneurial CIOs and technology leaders figure out how to get started:
1. Which disruption risks need to be prioritized and addressed?
For most CIOs and technology leaders, the table stakes to successfully running a technology function are to “keep the lights on” and protect your systems from potential security breaches. Attacks have significantly increased over the past year. According to the Cybercrime Tactics and Techniques 2019: Q1 Report by Malwarebytes, the number of threats businesses have detected has increased by 235% since the first quarter of 2018.
As these attacks increase, the “organizations” behind the ransomware are disrupting themselves by partnering to expand their distribution; they’re putting in place customer service capabilities to provide support on creating bitcoin accounts, as well as offering new insurance products against future disruption.
Even with this “customer service” approach, it is worth continuing to be aware of potential risks in this situation when reclaiming files from a ransomware attack. As an example, reclaimed files might have been changed or had malware included to facilitate a future attack.
So, to get an understanding of the potential disruption risks and to prioritize what needs to be addressed first, technology leaders can take a number of steps including undertaking a security assessment, understanding how data is managed (for example, access and backups) and defining known issues (known within the team).
2. If you embraced disruption, rather than fight it, what would you do differently?
E-discovery and associated tools are significantly accelerating the process that law firms go through to research and evaluate the files that are produced through lawsuits. In fact, what could have taken a team of associate lawyers weeks to read through and evaluate can now be searched and prioritized in a fraction of the time, both reducing costs and increasing the probability of finding the most relevant information.
However, in an industry that charges based on time spent, e-discovery can significantly change the economics of the industry. For leading firms, this is driving changes in pricing models (including separate charges for e-discovery, fixed fees and time-based billing) and hiring and staffing practices. This, in turn, is leading to innovation around staffing in the form of fractional paralegal services to supplement staffing.
To put into motion how to address the implications for your company, it is worth thinking through how your company could take advantage of these changes and win in the marketplace as a new entrant. And, from there, include current assets and market position, which could enable bridging to that advantaged position.
3. What internal capabilities and incentives are needed to enable disruption within the organization?
For CIOs and technology leaders, especially in well-established industries, even sequential innovation can have a significant impact. TGI Fridays, for example, used data that already existed within the enterprise to generate customer insights, engagement and orders. The brand’s investments in artificial intelligence have increased social media engagement by more than 500%.
These results come within an industry that is changing some of its foundational assumptions. Services such as UberEats and GrubHub have been expanding market opportunities for a wide range of physical restaurants to provide delivery services. Now, new restaurant concepts are enabling online delivery without having to make the investment in retails locations.
To get started on building this capability internally, entrepreneurial CIOs should be building a team and process that generates, prioritizes, and rapidly pilots or prototypes disruption ideas and then determines which ideas are good enough to take to the next stage.
This team should be incentivized based on speed and finding and polishing the good ideas that can have an impact on the business, not the number of bad ideas that are filtered out.
4. How does the culture of the organization inform your approach to disruption?
Some organizations are taking the next step and building the capability to disrupt on an ongoing basis. However, while the ideas for potential disruption are available to research, taking the next step to pilot and prototype new capabilities might be more of a challenge.
One client I worked with was highly mature in running projects and bringing defined capabilities and systems to market. But, when it came to piloting a new disruptive capability and seeing how it might work within their company, their project management mindset led to a state of paralysis; the culture of the organization expected each pilot to be successful, rather than allowing for a “fail fast, learn, try again” approach.
In considering how to bring the right approach, entrepreneurial CIOs can take different paths depending on the existing culture. For example, in a stagnant, perfectionist culture with low levels of innovation, the focus should be on bringing in new ideas (from within and outside the team) and celebrating the progress, failures and wins generated from these new ideas.
In more innovative cultures with large numbers of new ideas, the focus should be on building an innovation process that quickly prioritizes and prototypes the best ideas to bring them to market.
In both cases, the inclusion of incentives to innovate (for example, 10% of next year’s revenue should come from new products and services) shows what is important and can focus the team.