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Devising a playbook for digital disruption

Kenny MacIver — June 2015

Market leaders need to gain a fundamental understanding of how their sector could be disrupted by networks – and act decisively, believes Peter Hinssen.

CIOs need to play a more active role in enlightening their management colleagues about the potential of how the digital revolution is disrupting markets and creating new business opportunities, says business author, serial entrepreneur and digital visionary Peter Hinssen. And he speaks as someone who has witnessed plenty of those ‘light-bulb’ moments at first hand.

The violent disruption coming out of places like Silicon Valley is tangible, he says. And exposing senior executives to some of that is highly valuable. One of his favorite experiences in recent years was taking a group of insurance industry executives to visit Google, where they were provided with the opportunity to ride in a driverless car. “We drove them around for half an hour and they came out as white as ghosts. Not because of the driving, which was actually flawless. Rather, they came out thinking, ‘Damn, we make our money on car insurance and this is really going to transform our business.’”

Many executives don’t fully realize the impact such technology developments can have on their existing models, he says. These new competitors are playing by a very different set of rules, he says, unencumbered by the legacy of the past and much less focused on things like regulatory issues and territory.
Visibility into disruptive models

That was certainly evident in another example Hinssen cites. Again at Google — this time with the management team of a major European telco group — he gained access to the details of Project Loon, the company’s plan to create a global network of high-altitude balloons that can be used to provide free Wi-Fi access to people in rural and remote areas. “I always thought this was a project with a social corporate responsibility agenda,” says Hinssen. “But the reason Google is doing this is because there are 4.5 billion potential customers on the planet without Internet access. And if the traditional telcos aren’t going to move fast enough to address their needs, then Google will.”

The telco management team realized that they shouldn’t just be looking at their traditional competitors when networked companies like Google have the capacity to move into their world rapidly and in completely different ways, he says.

“CIOs today should take the opportunity to show that disruption is a reality.”

CIOs need to take the initiative here. “CIOs have been in a position in the past where they didn’t think it was their role to actually take their company on that journey towards transformation. But this is the time to really do that, to make sure that their role is more than it is today, that they reinvent themselves. CIOs today should take the opportunity to show that disruption is a reality.

And there is a pressing need to act. “Technology used to be nice, about making things a little bit better, a little bit more efficient. But technology has stopped being nice. Technology is now a little nasty, it’s disruptive and changing business models, changing consumer markets, changing our organizations. And CIOs are in a unique position because they uniquely understand what is at stake, they understand what the possibilities and realities are [and so] to help their management teams and boards understand what could happen if they don’t take this seriously.”

But that means management has to engage in more future thinking. “Companies have to spend a lot more time on fundamentally rethinking how their world could be disrupted, how digital could really transform their business. If you expose senior business people to what is happening there they realize the potential,” says Hinssen.

Peter Hinssen’s new book, The Network Always Wins, is out now.

First published
June 2015
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About: Peter Hinssen
An entrepreneur, writer and business school lecturer, Peter Hinssen advises organizations on the society-wide impact of networked digital technologies. A partner at disruptive innovation consultancy nexxworks, he is the author of ‘The New Normal’ and ‘The Network Always Wins.’

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