Assessing the value of disruptive technologies
Following a presentation I had given to a group of CFO’s, an honest audience member shared with me his concerns. “How do you think Blockchain could impact my company”? I sensed through his hesitation that he feared unless decisive action was taken, a commercial disaster at his company would be imminent. Given the attention that Blockchain has received, his question and concerns were understandable.
The problem was that despite looking out for his company’s best interests, this well-meaning CFO had asked the ‘wrong question’. On the surface it seems logical; Blockchain, like many other disruptive technologies, demands attention. It’s tempting to believe that anything with such power to disrupt should be swiftly ‘addressed’. Like an annoying fly, it must be swatted out the way so that normality can be regained.
A better way to address disruptive change:
Consider the scenario that you own a car and were in the market for insurance. If you were presented an offer for motorcycle insurance, the obvious misalignment of problem/solution would likely rule-out further investigating the product. However, what would happen if the product presented was called ‘Insurobot’; a digital technology startup that could predict driving behaviours so-to avoid accidents in the first place. Despite the product not addressing your specific need (traditional insurance for cars), the appeal of not crashing in the first place may inspire some further investigation.
Clearly, disruptive digital technologies are akin to Insurobot. When you’re backed by software that can prevent crashes – as a driver the mind boggles about the endless possibilities. When anything is possible, then what sits behind every new digital technology is ‘two weeks of fact-finding’ to determine the associated opportunity cost for your company. The key challenge with disruptive digital technologies is they don’t neatly address known problems. It’s through their use that people discover ways to serve customers, create better experiences, improve efficiencies, control worker safety risks etc.
It’s a result of experiential exploration that improved business models evolve and value is created. Disruptive digital technologies create new relationships; in effect deconstructing problems to their fundamental components. When we focus on their mechanisms, it’s not always clear how they can help us or how they may threaten the status quo. However, when combined with our organizational context, meaningful business problems can be addressed.
If we go back to the CFO who asked me about the power of Blockchain to threaten the sustainability of his company, a paradigm shift in thinking was clearly required. Nobody can be told when they are born what they will learn later on in life. The same is true for organizations – the challenges we face are often too complex to be addressed with a simple linear problem and solution paradigm. There is no way I or anyone else could speak with any credible authority on the future of their company to address disruption stemming from Blockchain. It would take leaders to invest in a structured transformational change to evaluate options to improve customer experience, create efficiencies, reduce risk and so on. It was at this point that the penny dropped for this CFO; he realized that it is not possible to be a spectator while addressing the digital disruption facing his industry.
We see many leaders coming to terms with this paradigm shift; letting go of traditional notions of control in favour of sponsoring structured approaches to experiential learning focused around creating value. When leaders appreciate the link between experience, learning and business value, their mindset is ready for digital transformation.
Contact Human Sparks to find out about de-risking your company’s digital transformation.