Presenting recent books: “Digital disruption” by Jens-Uwe Meyer. Thinking digitally – even radically
The digital transformation is changing markets, companies, and customer demands. But perhaps it is just the first step in a much more profound development? In his book Digital Disruption, management consultant Dr. Jens-Uwe Meyer addresses the next stage, digital disruption, and the question of how companies can respond.
Meyer makes it clear in the very first pages of his book: The digital transformation has not been thought through far enough. Digitization will not just change companies and markets, it will redefine them. This means that the business models of today will no longer work in the future. Which business models? Effectively, all of them.
Meyer shows that the notion of a certain industry that could not be digitized is a misconception: whether it is civil engineering, house building, cosmetics, legal or strategic consulting, retail, or other industries, there are examples everywhere of how digital disruptors have used algorithms and networked hardware to take over processes and assail the old corporate top dogs. Drones survey construction sites from the air, while driverless excavators and bulldozers carry out the building work. The UK Ministry of Justice is developing digital courtrooms in which negotiations can be executed via video conference. A conceivable next step: Standard procedures will be processed and decided on by algorithms, without human involvement. The technology for this is already available, but the acceptance still is not.
Company portraits distributed throughout the entire book show, among other things, how companies can react disruptively. This includes not only the usual start-up suspects, but also hidden champions and established names like Gardena or Deutsche Telekom.
The principles of digital disruptors
Regardless of the industry to which digital disruptors apply themselves, their ways of thinking and acting frequently follow the same principles:
- Benefits instead of buying. Digital disruptors often do not sell their own products, rather their benefits: car sharing, office sharing, washing machine sharing, etc.
- Crowdification. Material resources, knowledge, creativity, and performance capacity can be incorporated by numerous individuals. One example is Wikipedia.
- Target group one. Highly customized offers are replacing mass media, mass services, and mass products.
- Crystal ball 3.0. Data-based predictions on a customer’s behavior or desires make it possible to present them with the right offers at the right time.
- Competence standardization. What can be standardized and digitized will be standardized and digitized. Robot journalists write sports reports, while self-driving busses chauffeur passengers to their destinations.
- Centralization of the customer interface. Whether it is a comparison portal or a sales platform: New suppliers are offering their customers central access to fragmented markets.
- Radical efficiency improvement. Many jobs consist of transferring data – from paper into a computer system or from a computer system onto paper – or confirming it, say, in a property purchase. It is a bureaucratic expense that is highly inefficient and will be eliminated through digitization and automation. Blockchain technology, for example, can document the conclusion and processing of a purchase agreement.
And standing above it all is the principle of the digital lifestyle. The smartphone is the door to the outside world, there is an app for everything. In a foreign city, you no longer have to ask the hotel reception for a restaurant recommendation; you just take a look at various rating portals. The pizza for a cozy evening watching TV is not ordered over the phone, but through an online form. The digital lifestyle is fast, because feedback takes place within a matter of seconds. It is spoiled, because users can always compare digital offers with the best. And it is fickle. Users’ preferences change quickly – a website that yesterday scored points with its cool design might no longer be considered “in” today with that very same design.
What digital disruption means for companies
A conclusion by Meyer: The culture and structures of most enterprises and mid-sized companies are aligned towards promoting the operative business – not developing disruptive business models. So, for example, classic project management is unsuitable for dynamic, agile projects – in contrast to the flexible scrum principle, where planning is done in a gradual and relatively open-ended way. That means that companies have to throw their customary procedures overboard. Meyer describes what they should do instead in the third chapter.
For example, he challenges them to develop “schizophrenic” strategies when markets are on the move. This means maintaining what you have as long as possible, while at the same time replacing it with radical new developments – and both of these consistently. Another important point: Promptness. Those who adhere to expensive administrative processes in which umpteen committees need to be taken into account will not be able to launch their innovations quickly enough, and will be overtaken by the competition.
Executives should get their employees excited about innovations by setting bold goals, and not just allowing creative failures, but welcoming them – some allegedly bad idea may turn out to be a hole-in-one in hindsight. Companies should ask themselves two questions: First, what basic problem did our company solve when it was first formed? Second, are we actually still solving this problem? This way they find out whether the foundation of their business still exists, or has already disappeared.
But the book is not limited to food for thought for the economy alone – in the fourth chapter, the author briefly responds to societal changes as part of digitization. Where does Germany stand in digitization compared to the international competition, how can schools teach important skills, what does digitization mean for the job market?
Meyer’s final piece of advice to his readers: Learn to think of your company, your department, and your own job in a radically digital way. He shows how you can proceed in doing this in a way that is interesting and enjoyable to read.
Dr. Jens-Uwe Meyer, Digitale Disruption: Die nächste Stufe der Innovation (Digital Disruption: The Next Stage of Innovation), BusinessVillage, Göttingen 2016, €24.95
Dr. Jens-Uwe Meyer has been, among other things, a police commissioner in Hamburg and a studio head at the television station ProSieben. He earned a doctorate at the HHL Leipzig Graduate School of Management, and today is an Internet entrepreneur, management consultant, and keynote speaker. With ten books, he is considered one of Germany’s leading innovation experts.
Author: Editorial team Future. Customer.
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