Digital disruption – will it make or break your business?

On 22 September the Ad Ultima Group brought together its clients for a captivating afternoon and culinary evening. Over the next few weeks we will be reporting on the presentations and guest speakers from the day. To kick off, we had Jo Caudron come and shake things up.

Jo Caudron, one of Belgium’s leading internet pioneers, has his finger on the pulse of the latest developments in technology, but prefers to keep an eye on current trends. “The best tell-tale sign of shifts in the market is what is known as disruption”, explains Jo. “Disruption is a term that is often used incorrectly but the original meaning is now more topical than ever.”

What is disruption?

Digital disruption is any new technology that upsets the existing business models, in the way that video on demand and Netflix ousted video rental shops, Spotify is putting a severe dent in CD sales and Uber is turning up the heat on existing taxi companies and legislation. Jo Caudron calls these examples ‘unicorns’, but smaller disruptions happen regularly but do not always have radical consequences. Blendle, for example, has given printed magazines cause for concern, while Meerkat and Periscope are opening the doors to a new way of making television.

Transforming disruption into an opportunity for growth instead of a threat is an art form. Anyone who ignores disruption or tries to work around it will always lose out. “Digital disruption is real. Expect a smack in the face” says Jo Caudron. “Turn digital disruption into transformation by rigorously reshaping your business model.”

Recognising and acknowledging digital disruption in time

Transformation comes in waves roughly every five years. Jo Caudron compares these waves to a roller coaster. As soon as disruption affects your sector, you are also on the ride, whether you like it or not. At first, you barely notice it, then it slowly ascends and before you know it you are in free fall. At that point it is too late to take action. Caudron points out that it is predominantly about recognising and acknowledging new technology in advance and understanding what this can and will mean for your sector faster than your competitors can.

In his book ‘Digital Transformation’, Caudron uses seven metaphors to explain how you can recognise a disruptive model quickly and the best way to deal with it. He suggests that a sector that has been affected by disruption has only three years to respond competently. This makes identifying patterns in time essential.

Disrupt. Model. Transform. Repeat.

To go from disruption to positive transformation, you must dare to rethink your entire business model. The digital world is penetrating through to the core of your strategy and is impacting on all sections of your company. Caudron likens your company to a tough battleship – it is perfect for what it is designed for, but is not as adaptable as a fleet. With a fleet, you can distribute your activities across smaller, semi-autonomous ships that can be deployed more rapidly if this turns out to be necessary. To switch from a battleship to a fleet, you will also have to radically change your business culture and incorporate the digital aspect across all sectors instead of seeing it as a separate category. Volkswagen is a battleship, Tesla is a fleet that continually invests in new boats (start-ups) and then incorporates them into the organisation at a later stage.

So start as soon as possible by writing an extensive digital plan that considers all aspects of your product. Appoint a Chief Digital Officer (CDO) alongside your CEO. Don’t throw away what you have, but revamp it quickly and thoroughly. Optimise or incorporate the disruption straight away. “Above all, do not be scared to deviate from your core activity. Cannibalise yourself before someone else does”, adds Caudron.

Are you ready for the digital disruption in your sector?