The Essentials of Digital Strategy
In July 2015, during the championship round of the World Surf League’s J-Bay Open, in South Africa, a great white shark attacked Australian surfing star Mick Fanning. Right before the attack, Fanning said later, he had the eerie feeling that “something was behind me.” Then he turned and saw the fin.
These days, something of a mix of the fear of sharks and the thrill of big-wave surfing pervades the executive suites we visit, when the conversation turns to the threats and opportunities arising from digitization. The digitization of processes and interfaces is itself a source of worry. But the feeling of not knowing when, or from which direction, an effective attack on a business might come creates a whole different level of concern. News-making digital attackers now successfully disrupt existing business models—often far beyond the attackers’ national boundaries:
Simple (later bought by BBVA) took on big-cap banks without opening a single branch.
A DIY investment tool from Acorns shook up the financial-advisory business.
Snapchat got a jump on mainstream media by distributing content on a platform-as-a-service infrastructure.
Web and mobile-based map applications broke GPS companies’ hold on the personal navigation market.
No wonder many business leaders live in a heightened state of alert. Thanks to outsourced cloud infrastructure, mix-and-match technology components, and a steady flood of venture money, start-ups and established attackers can bite before their victims even see the fin. At the same time, the opportunities presented by digital disruption excite and allure. Forward-leaning companies are immersing themselves deeply in the world of the attackers, seeking to harness new technologies, and rethinking their business models—the better to catch and ride a disruptive wave of their own. But they are increasingly concerned that dealing with the shark they can see is not enough—others may lurk below the surface.
Digital disruption can be a frightening game, especially when some of the players are as yet out of view. By subjecting the sources of disruption to systematic analysis solidly based on the fundamentals of supply and demand, executives can better understand the threats they confront in the digital space—and search more proactively for their own opportunities.