December 22, 2016

The Widening Gyre: The Spread of Digital Disruption

CIO Strategy Exchange, New York, 2016

This report tracks the battle lines and attack velocity of digital disruption—a near universal member request. Ubiquitous technology has overturned old rules of commerce and competition. Scrappy start-ups armed with emerging technologies and asset-light business models are challenging incumbents on their own territory. Interviews centered around two existential questions:

  • How are disruptive risks and opportunities identified and assessed?
  • What are enterprises doing to counter potential threats through innovative transformation?

The menace of digital disruption has generated breathless buzz among business leaders and pundits alike. A Google search on the term draws five million hits, including this potboiler: “In the next 100 years, we won’t experience 100 years of technological progress … we’ll experience 20,000 years’ worth.” Even the clearest minds agree that all enterprises are in danger of disruption. New entrants displace traditional businesses at a torrid pace, thanks to digital game changers like smartphones, e-commerce, IoT and 3D printing.

The report starts with a brief primer on disruption theory to enhance situational awareness. Next come the counter-disruption strategies of fifteen CIOSE enterprises, followed by the radical turnarounds initiated by three battle-tested tech CEOs: Cisco’s John Chambers, Oracle’s Larry Ellison and Microsoft’s Satya Nadella.

The sad story for most incumbents is that their fear of losing their traditional core operations causes them to cram the new innovation into their traditional business and miss the new opportunity entirely. Dispatches and fresh intelligence suggest an uncertain future as rampant digitalization accelerates the pace of change. Every industry will be tested. Thorny challenges lie ahead, but those who grasp the nettle will find opportunities to thrive.