Digital Disruption

Co-authored by Kai Riemer and Robert B. Johnston

What is Digital Disruption?

Digital disruption refers to changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking.

Digital Disruption can be seen as both a threat and an opportunity:

• ICT-induced change happens at a pace and scale that impacts on existing business practice in disruptive ways, threatening and invalidating existing business models.
• Digital technologies offer new opportunities for the creation of innovate business models for entrepreneurs to compete with established business practices in a wide range of industries.

Digital Disruption can occur on various levels:

1. Disruptions to individual life practices (example: Mobile connectivity disrupts established work-life boundaries)
2. Disruptions to work practices (example: Narrating work via microblogging in the workplace changes what counts as (valuable) work)
3. Disruptions to business practices (example: Workplace social media disrupts the way information travels in the organisation and induces shifts in power relationships)
4. Disruptions to industry structures (example: Digitisation of media content and user-generated content disrupts traditional value chains of content production and delivery)
5. Disruptions to societal systems (example: Social media participation disrupts traditional practices of public opinion making)

While the above examples point to profound changes to established business practices, they do not fully illustrate what exactly makes these changes truly disruptive.

In the following we will outline our thoughts on the topic.

What is disruptive about digital change?

Our observation is that disruptive change is change that disrupts our understanding of the world.

Digital disruption changes the basis on which we make sense of, give meaning to and understand our business and work-life practices.

An example might illustrate this. The emergence of devices such as the iPad has changed fundamentally not only how we consume data and documents, how we communicate, how we learn and how we perform various business practices but also more fundamentally our understanding of what a computer or phone is, what counts as a workplace, or what an appropriate business meeting looks like. In consequence it has also brought about new professional identities such as that of the modern tech-savvy road warrior manager.

The nature and magnitude of these changes was hardly predictable when the iPad was released (it is worth googling and reading the commentary at the time). Rather, they are the result of continuous social sense-making and adaption processes.

We argue that digital disruption does not simply change markets, or present innovative business ideas (although that is one result).

Digital disruption is not merely the digitisation of an existing business model or the replacement with a digital alternative, such as putting University lecture content online or selling products through online shops. This is a far too limited understanding.

How to understand Digital Disruption?

Disruptive change cannot be grasped by merely extrapolating into the future what we know today. Such an attempt at forecasting leaves out that actors within traditional business practices innovate using digital technologies, they do not merely stand still and wait to be disrupted by some mysterious force.

More importantly, as these business practices change so does our understanding of what counts as meaningful, valuable, and the right way of performing these business practices, which brings about further changes.

Consequently, the main argument is that some digital innovations disrupt the very basis on which we understand the concepts by which any extrapolations into the future are made, such as ‘business value’, ‘communication’, ‘what counts as a transaction or content or a product’, ‘ ways of working’, ‘what counts as a workplace’ and so on.

Forecasting the impact of digital disruption becomes impossible when the disruption occurs to the very basis on which we create a predictive model. When what counts as a fact changes, any attempt to build a prediction on the known facts of today will fail. All data collection, even big data, involves some data selection and interpretations which are always based on these notions of self-evident fact.

What can we do then?

What is needed instead is a better understanding of how to cope with and shape disruption, how to engage in productive sense-making processes in order to advance our understanding of industry processes, business value etc. and thus to innovate and adapt as digital disruption unfolds within a particular sector or industry.

As a consequence, we need more:

1. foundational research into the particular nature and structure of disruptive change processes and
2. applied research initiatives as part of an ongoing sense-making and adaption process in order to shape the disruptive processes as they occur in particular sectors and industries.