https://www.amazon.com/Lean-Enterprise-Corporations-Innovate-Startups/dp/1501257811
http://www.afr.com/opinion/why-digital-disruption-and-innovation-are-our-industrial-revolution-20160817-gqummb
http://www.afr.com/opinion/why-digital-disruption-and-innovation-are-our-industrial-revolution-20160817-gqummb
Two hundred and fifty years ago we lived in a pre-industrial world. Then came the industrial revolution; in modern parlance, "disruption" on a grand scale. Now it is happening again and we are living in arguably the most transformational time in human history; and it is digital disruption that is rewriting every part of our lives. No sector or industry will be immune to the dramatic shifts that innovation delivers now and in the future.
Retail (Amazon, eBay, Alibaba), advertising (Google, Facebook), travel (Expedia, Tripadvisor), hospitality (Airbnb), transport (Uber), IT (cloud compute/storage/PaaS/SaaS from AWS, Google, Azure), Media (Facebook, Twitter, Google, Wordpress, Blogger, Buzzfeed, Huffington Post, Medium), Payments (PayPal, Apple Pay, Google Wallet), currency (Bitcoin, Blockchain), cars (Tesla, Waymo), car share (goGet), publishing (Kindle), real estate (Zillow, Trulia, REA), entertainment (Netflix), music (Spotify and iTunes), education (Moocs and Khan Academy), healthcare (AI and big data startups), post and communications (Email, Facebook, WhatsApp), manufacturing (robotics from ABB, Rethink Robotics), insurance (Amazon) and recruitment (LinkedIn).
Startups no longer need physical servers, physical firewalls, physical routers, database management system licences, operating system licences – they don’t need to buy any of the software or the hardware required to run their business. They pay by consumption. This is a radical shift that has levelled the playing field and made it easier for new competitors to enter markets.
Large Institutions can take advantage of the same opportunities. They can begin to act like the very startups trying to disrupt them. They can run experiments, they can do things quickly, they don’t have to go through long CAPEX cycles. Today, they can go onto AWS and quickly experiment to test their ideas. They don’t have to wait for the boxes to arrive before starting, significantly reducing cycle times and cost.
Business processes and products need to change with the new economics. Digital transformation means:
- Responding in real time to consumer needs, not waiting six months for the next release cycle
- Expanding the market for a product to everyone with a network address, not just people in geographic proximity to shopfronts
- Embracing commodity infrastructure and open source with cloud services to build great products at low cost, not relying on ancient legacy systems
- Reducing risk as teams experiment with products to see what works, rather than aiming for perfection at the end of a project, before finding out users don’t want what’s been delivered
- Delivering faster, simpler, better products that meet user needs and create increased profitability.
- Eliminate traditional IT silos where many different teams are needed and require coordination of activities between the teams. Small, agile DevOps teams and use of services are far faster.
Already today the largest 5 companies on the S&P 500 are digital tech companies:
| Symbol | Company | Cap Rank | Market Cap | 1d Chg | 1m Chg | 12m Chg |
| - | - | on 5/11/17 | on 5/11/17 | on 5/11/17 | on 5/11/17 | on 5/11/17 |
| AAPL | Apple | 1 | 802.7 | 0.5% | 8.7% | 66.4% |
| GOOGL | Alphabet | 2 | 661.2 | 0.1% | 13.8% | 30.8% |
| MSFT | Microsoft | 3 | 528.5 | -1.2% | 4.6% | 34.1% |
| AMZN | Amazon.com | 4 | 452.9 | -0.1% | 5.0% | 32.9% |
| FB | 5 | 434.8 | -0.2% | 7.2% | 25.5% |
Digital disruption is everywhere and the future is uncertain – no one knows what the world is going to look like. Due to the accelerated pace of change, today's plans might be obsolete tomorrow, in this environment, learning how to ask better questions can create or lead to new ways of thinking.
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