Forrester’s ‘Digital Disruption’ Offers New Take on Innovation
We’ve been hearing quite a lot about “digital disruption” lately, particularly from Forrester Research, which has released a book, two reports, and a webinar on the topic in the last few months.
The point of digital disruption is this: between free data, free tools, and nearly free marketplaces such as the Apple and Android app stores, the barrier to entry is essentially lower than ever before, meaning that companies are vulnerable to innovation challenges from potentially many more directions.
“Digital disruption, when properly understood, should terrify you,” intones Forrester analyst James McQuivey sonorously.
But if you can get past your terror, McQuivey gives some examples of what he calls digital disruptors in his book, predictably called Digital Disruption — the first couple of chapters of which are freely downloadable from Forrester (and the whole book is available on loan for free if you’re an Amazon Prime member with a Kindle).
There’s Dr. Hugh Rienhof, founder of FerroKin BioSciences, a drug development company that is virtually staffed – that is, employees work from their homes while the various testing functions are outsourced to labs. “Consider the daunting job of managing the sixty separate people across fifteen different countries working for vendors that provide everything from actual laboratory work to paperwork for FDA filings,” McQuivey writes. “Much of what these vendors did historically depended on pushing papers back and forth. The bureaucratic tangles that can ensue when these companies have to work together could consume even more time and money.”
Instead, McQuivey writes, the company uses tools such as data capture, secure online databases, and email to communicate with each other more quickly and simply than by using paper. “I think that if you can make a decision in a day that would take a week or a month, the whole process is improved,” Reinhof is quoted as saying.
Moreover, collapsing the process makes it easier for employees to see the whole thing, rather than think of themselves as being silos (or, perhaps, frogs in a well?). “’Typically, when you’re in a silo, it’s underground and all you can see are the walls around you.’” McQuivey quotes Reinhof as saying. “’But if you allow people to take on responsibility, you can see further down. What we deliberately set out to do was to involve all the people in all the facets of the program — clinical, chemistry, regulatory, business development, and animal. They are all aware and can provide input to any aspect of the process from the very beginning. That way everybody is familiar with the whole thing.’” Digital serves as the bridge to connect the people, and documents are posted on a server to which they all have access, he writes.
With free tools, companies face the possibility of ten times as many competitors, with a cost to develop and bring ideas to market at a tenth of what it used to be – a hundred times the innovation power, McQuivey warns.
Forrester said it has identified three elements that determine a company’s readiness, writes Barry Levine in CMSwire:
- “digital-specific enthusiasm” driving the transition
- digital age skills for managing customer relationships and obtaining insight from data
- policies to encourage the creation and delivery of new experiences
To help assess your company’s digital readiness, Levine writes, Forrester has set up a five-question Readiness Assessment tool, designed to determine if your company is below average, solidly average, variably average or above average.
Once you have a sense of where your company is, Forrester recommends four steps to prioritize a response to digital disruption:
- Creating small innovation teams
- Working to break down boundaries between corporate silos
- Getting enthusiastic senior executives to lead the effort to remove policy barriers
- Insisting on short development time frames
Basically, McQuivey is encouraging companies to become digital disruptors themselves, at which point this book becomes not so different from all the standard innovation books, like the seminal The Innovators’ Dilemma by Clayton Christensen, (who, in fact, is quoted in this book): It also throws in dashes of books like Don Tapscott and Anthony Williams’ Wikinomics, about crowdsourcing, and Clay Shirky’s Here Comes Everybody, about free social media tools,
The final takeaway is both a piece of advice and a warning: Learn to do it yourself before they do it to you.