To disrupt, or not to disrupt – is that even a question? All signs point to disrupt, but the real question is: To what extent? That is the question I intend to explore.

But first, let’s cover the basics. What is digital disruption? Gartner Inc. defines digital disruption as “an effect that changes the fundamental expectations and behaviors in a culture, market, industry or process that is caused by, or expressed through, digital capabilities, channels or assets.” [1]. But what does that mean, exactly? In layman’s terms, digital disruption is a digital capability-driven change that shakes the industry’s core. Chief Information Officer (CIO)/IT Strategist Linda Tucci provides some excellent examples: digital cameras and the film industry, and on-demand services such as Uber and the taxi industry [2]. Another excellent example is cloud services as opposed to on-premises technology infrastructure.

Regarding digital disruption, the authors of “Finding Your Digital Sweet Spot,” Tunde Olanrewaju and Paul Willmott, argue that not all industries face the same opportunities or threats [3]. Therefore, the extent to which your organization invests in digital change may vary.

Olanrewaju & Willmott point out that industries such as Banks, Hotels, and Airlines are exposed to high digital demand; therefore, they are more exposed to digital disruption. In comparison, grocery retailing and apparel industries are subject to a smaller digital demand, so they may be less impacted by digital disruption.

Now that we have established what digital disruption is and that practically every industry is impacted to some extent, how do industry leaders know what digital disruption will mean to their organizations and how should they prioritize the disruption? According to Gartner, Inc., organizations are lagging in addressing the fact that digital disruptions are changing technology, business, industry, and society today [4]. So, there’s little time to waste.

To help leaders better understand disruptions and decide which disruptions to prioritize, Daryl Plummer et al. (2017) of Gartner, Inc. provides an overview of multiple tools, which I summarize below:

1. Digital Disruption/Disrupter Scale
2. Scale, Reach, and Richness of a Disruption
3. The Digital Disruption Scale
4. Digital Disruption Threat Vector
5. Disruption vs. Innovation: Creating a Virtuous Scale of Change

The digital disruption/disrupter (DD) scale is a graduated scale that shows the relative impact of multiple digital disruptions. At first glance, the DD scale may look familiar to you. If it does, you likely paid attention in science class because the DD scale is modeled after existing weather and environmental scales such as the Enhanced Fujita Scale for tornados, the Richter Scale for earthquakes, and the Saffir-Simpson Hurricane Wind Scale [4].

Like the Fujita scale, Plummer et al. notes that the DD scale has five levels, increasing the magnitude of disruption. The five levels are described on the left side of Figure 1. The right side of Figure 1 shows the more significant secondary effects of the disruption. Plummer et al. explains: “Disruption catalysts spawn changes. If a catalyst has no secondary effects, then it is not a disruption.” [4, p. 4]. Figure 2 is a basic example of a current (left side) and historical (right side) Disruption Scale.

To further refine the comparison and selection of digital disruptions, three factors must be considered across four major elements of disruption – technology, business, industry, and culture, says Plummer et al. Those three factors are Scale, Reach, and Richness. Explanations of each factor can be found in Figure 3. When using these three factors, a practitioner could deduce varying levels of investment required by the disruptions.

The next progression is to create a Digital Disruption Threat Vector graph. Gartner, Inc. says to “Start with a disruption at one level and see what it spawns at higher levels of interest.”, citing an example using the introduction of e-books as the catalyst. A catalyst such as an e-book could ultimately lead to something as threatening as the disintermediation of publishing houses [4, p. 10]. Figure 4 provides a visual representation of this example.

Lastly, having a firm understanding of Disruption versus Innovation will help identify their unexpected effects. Plummer et al. describes digital disruption as an outside-in activity, meaning one company’s innovation may end up being the other company’s disruption [4]. In contrast, innovation is an inside-out activity. Figure 5 shows a visual representation of this concept. Understanding Disruption versus Innovation will ultimately lead your organization to be more informed on disruption potentials that may be worth prioritizing.

Now that we have reviewed a summary of how to recognize digital disruptors, let’s look at an example of a modern digital disruption: The Cloud. The cloud is a behemoth spanning significantly more than virtual servers. The cloud powers and accelerates the adoption of concepts such as Machine Learning, Artificial Intelligence, Internet of Things, you can even utilize satellites in outer space if you have the need. From these examples alone, you can deduce how broad the cloud is. Utilizing the tools provided by Gartner Inc. will help you and your organization determine which areas of this digital disruption phenom to focus on. My next article “Digital Disruption: The Cloud“, goes into greater detail on the primary and secondary effects of the cloud.

In summary, organizations recognize that digital disruption is here to say but are usually slow in addressing how disruptions impact their operating models. In today’s world, understanding the multiple threat vectors of digital disruption is challenging and may cause organizations to question how much they should invest in the disruption. Luckily, as Gartner points out, there are tools available to help organizations better understand the digital disruption forces in their industry and the vectors they should prioritize.

References

[1] Gartner, Inc., “Gartner Glossary,” Gartner, Inc., [Online]. Available: https://www.gartner.com/en/information-technology/glossary/digital-disruption. [Accessed 28 August 2022].

[2] L. Tucci, “What is digital disruption?,” TechTarget, July 2019. [Online]. Available: https://www.techtarget.com/searchcio/definition/digital-disruption. [Accessed 28 August 2022].

[3] T. Olanrewaju and P. Willmott, “Finding your digital sweet spot,” 1https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/finding-your-digital-sweet-spot November 2013. [Online]. Available: https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/finding-your-digital-sweet-spot.

[4] D. Plummer, D. Smith and D. Yockelson, “Measuring the impacts of digital disruption: introducing Gartner’s digital disruption scale,” Gartner, Inc., 2017.