Strategies for digital disruption

30 October 2019

Road with colourful light trails at a body of water

Topics in this article

Run, change, reinvent. Business strategies for the age of digital disruption

Multiple catalysts of innovation have been moving at a dazzling speed, creating the perfect wave for disruption. There’s enormous potential for just about anyone to do just about anything. To succeed in the age of digital disruption, first find a problem. Then, create an approach which changes the way the problem is solved today.

Three elements of the perfect wave

This is not the first time in history that innovation and technology have fundamentally changed the way we live and work. But it is the first time we’ve been exposed to change at this scale and speed.

The exponential ramp-up of available technologies we have today is not something the world has seen before. Previous industrial revolutions that transformed the world were rooted in one key technology. Today, you can mention at least 10 technologies that can change any business, any industry, any part of society.

In addition, the speed of transformation is astonishingly fast. In the past, change would take place over years, even decades. Today, entire industries can be disrupted in just a few months.

And it’s no longer only large corporations with vast resources that are at the center of change. We’ve configured a world that’s highly democratized, which means that today, anybody can change an industry.

Together, these three elements have created a perfect wave for the age of digital disruption.

The question is: How should businesses respond?

10 technologies, 10 agents for change:

  • artificial intelligence/machine learning
  • virtual/augmented reality
  • robotics
  • blockchain
  • cybersecurity
  • crowdsourcing
  • digital biology
  • digital fabrication
  • Internet of Everything (IoE)
  • quantified self

Put the problem before the technology

Innovation isn’t about the technology itself. It’s about new business models that leverage technology.

Can technology change the world? This is a good question to ask, especially when you look at the list of 10 disruptive emerging technologies we think are the foundation of the digital revolution.

But you could change many industries today with already mature technologies. Innovation is not about technology: it’s about finding a problem and creating an approach that changes the way the problem is solved today. Then, when you want to take that approach from concept to reality, you have many technology levers to do so. Five years ago, we had three to five technology levers to create solutions. Today, we have technologies that are already booming – such as social and mobile – as well as emerging technologies such as artificial intelligence (AI) and Internet of Things (IoT).

This really opens the door to create any scenario you can imagine.

Pillars of technology change: artificial intelligence and Internet of Things

AI in all its dimensions, from conversational AI to robotics and machine learning, is having a major impact on how we live and work. On the IoT side, any analog element of our lives – a car, a road, a factory, a house – is becoming digital, allowing us to capture data and create an environment that not only senses change but reacts to it in real time.

Three strategies for disruption

Innovation is only one part of the answer. For any company, in any industry, these three strategies are mandatory: Run your business. Change your business. Reinvent your business.

The fact that you need all three is often the missing link, as organizations tend to focus mostly on innovation. Even then, they’re applying what we call incremental innovation: creating a new or improved version of an existing product or service to change the business.

What they also need to consider is radical innovation, where you don’t start with a product that needs improving but a problem that needs solving – and consider any number of far-out ideas to get to that solution and reinvent the business.

Examples of two types of innovation

Incremental innovation

Radical innovation

Product: How do I make this car/truck faster and safer?

Problem: How do I get these people/goods from point A to point B quickly and safely?

Steps to radical innovation

Radical innovation poses its own unique problem, though: its aim is to change a business which, by its very nature, is designed to fight the agents that want to change it. So, in its attempts to be disruptive, the incumbent business may very well act as its own worst enemy.

Evidence from multiple industries and companies shows that this is the primary source of failure of radical innovation. To address disruption effectively, you need to decouple radical innovation from your core business:

  1. Set up a team whose sole mission is to reinvent.
  2. Give them the authority to create a whole new way of doing business.
  3. Isolate them from the basic operations of the company and your core business.
  4. Let them start small and explore.
  5. Once they’re big enough, they can either come back into the business or develop as a separate, radically different enterprise.

Today’s success is no guarantee of longevity. We’re facing a world where change will be bigger and faster than ever before. There will be fewer limitations and more tools available. My advice for any organization is to play with each of these dimensions: run (do business), change (do better), and reinvent (do different). Unlearn to relearn. Don’t stop because you’ve found a way to do something better. Keep going until you find something unique.

Future disrupted at NTT

We know that in tomorrow’s intelligent world, innovation that’s driven and enabled by technology will be crucial to every industry. This is why, over the next five years, NTT Group will invest an average of USD 3.6 billion a year in innovation initiatives.

We’re building a platform to address problems and apply a disruptive mindset to creating completely different solutions.

At NTT, we want to do things for real and for good – and help our clients do the same. Our open-innovation framework harnesses the collective effort of internal and external innovators and innovations, enabling us to partner with organizations globally to shape and achieve outcomes through intelligent technology solutions. Read more about how we are using innovation to disrupt for good.

Marc Alba

Marc Alba Otero

Senior Vice President, NTT, Inc., and Head of NTT Disruption