When a disruption happens in your market, whether you may have produced it or not, your reality changes. it changes drastically. The effects of disruption impacts deeply on your organizational health and if it is not managed, then it’s a gruelling pathway to go back to a healthy status.
 

We have covered in a previous post, about what is a downturn and what is a disruption.

English https://bit.ly/3THdEtt

Spnish https://lnkd.in/d-2Mg44g

We now take you on a journey into Disruption Inside Out

Many organizations have suffered disruptions and have not been aware, so they have experienced evident cultural health damage without even understanding what's happening.

Some others have denied the fact that they are not digital-ready nor even agile and decided to dealing with the culture consequences of disruption for ever.

In any case, those who arrived to the conclusion that it’s crucial for them to return to a healthy status of the culture and start on a cultural recovery, but are now experiencing significant change from the isolation.

In a ship crash, if you don’t work to fixing the holes produced for the incident, there is no sustainable effort capable of keep the boat floating for ever. Our culture is the same.

But don't be afraid if your workspace is suffering something similar to what we are describing here!. We’ll share with you in this article, some valuable knowledge to help organizations identify when they are exposed to this kind of hazard and in what stage of disruption they are, so the organization can arrive to a better diagnosis and the treatment to ensure the successful journey of disruption.

To start lets zoom into the particular stage of the innovation which is an early indicator that helps to be ready for the journey of disruption

The 6 Ds of exponential growth, introduced by Peter Diamandis, describes the stages that a technology goes through as it rapidly evolves and impacts the world.

The original content is focused on a product viewpoint, but we have modified it to allow the reader to understand what happens inside the company behind the innovation but also what we can expect to happen in the inside-markets of the organizations when it occurs.

First of all, lets set the magnifier on the innovation side of the story.

1. Digitalization: It all starts when something becomes digital or when an offer become evocative enough to address side-market offers (I.E. turning physical photos into digital images, or once digital images , incorporated into cellphones). Once it's digital, it can be easily shared and improved. Like AI of today taking the various aspects speech, writing, image and other asset recognition, etc... 

2. Deception: At first, the progress seems slow and even disappointing only growing at traditional markets rates. The technology might not seem like it’s growing much, but it's quietly learning and getting better. Until the point where the market adopts the new offer, the company experiences some internal revolutions, shareholders become very nervous, there is pressure for the owner of the new offer to demonstrate results, conflicts are increasing and likely increased turnover also, everything is displaying an absolute fail.  

3. Disruption: Suddenly, the technology improves enough to drive adoption and create a new state of customer needs, driving new behaviors and consuming habits, making old ways of doing things obsolete. Think about how smartphones changed the way we communicate. Internally, in the organization, everything is celebration. The Offer has taken off and started to produce increasing revenue faster than expected. But this state of happiness can certainly be fleeting while the company doesn’t have the proper management knowledge to deal with this kind of growing, because the traditional approach pursues efficiency when in fact the situation requires efficacy.
   Imagine from one week to another, having 5 times of the requisitions and billing to manage and 3 times post-sale demands; there is no company that can grow the staff at this pace, with out of date ways of thinking and operating.

4. Demonetization: As the technology improves, it gets cheaper and cheaper. What used to cost a lot, like making long-distance calls, becomes almost free. Sometimes disruption that is at scale can start at this point, look at the cost of your access to ai vs the cost of your access to a good camera, now just about every smartphone has a pretty good camera. Another effect of technology and expansion is the increasing number of competition pushing to gain part of the market share using price and customization the basis of the strategy. And while new offers are able to reduce the margins, conflict increases again in the company, due to innovation that cannot be rolled-back and new consuming habits can only be replaced for new ones, forcing the company to innovate again and again, until the point the company can reach again a stable level of operational health.

5. Dematerialization: Over time, products and services become smaller or even disappear, like how we no longer need separate cameras, maps, and music players—they’re all available in our phones. And with that, part of the older ecosystem is being affected like paper providers, transportation and storage services, etc...

6. Democratization: Finally, the technology becomes accessible to everyone, not just the wealthy or privileged. This widespread access can have a huge impact on society. Ai is still finding its feet, however the smartphone can be really smart or not so smart, but still smart enough for a camera better than we had for a fraction of the cost and performance 10 years ago. Democratization makes room to everyone for being able to address a specific customer profile needs and enable new offer to consolidate as the new normal.

These stages show how small innovations can lead to big changes that transform the world.

This concept is quite useful to understand the trip, but it is explained from the product perspective.

When the rest of adjacent organization faces the 6 Ds of exponential growth in the market, it goes through a significant different path.

1. Digitalization: A new digital product or service was released in some part of the globe, but your company doesn’t sense it. Probably someone on your staff may have noticed it, but it isn’t yet a topic addressed in the board room.

2. Deception: The new offer is creating its own place, a new market is emerging silently, slowly, but is unstoppable.
   There is  still no reason to have this new interest emerging in your mind, it’s not seen as a threat for our offer. We are fine, It won’t happen to us. There is a certain illusion of a calm, although in the end, the board has started talking about it for some reason.

3. Disruption: As the technology rapidly improves, it begins to become kind of viral and people start looking to it and adopting it. Disruption starts impacting organization’s existing business models. The organization might find that its traditional products or services are becoming outdated. The competitive edge is expiring internally, this creates a sense of urgency, It’s not yet clear why, where, how. Uncertainty and conflict increases, as does the pressure for results. Leaders ask for innovation but risk aversión and current competitive advantage protection kills any ideas. They start talking about rethinking the strategy, restructuring teams, or even pivoting its entire business model to stay competitive. There are too many options!! Which business should the company stop or put on the backburner? And what happens with all the investments to finance the current offer? What happens if product or service has not yet recovered the investments (something common when product or service was developed to tie the competition. The famous “lets make a digital wallet!!!”). Lots of promises will be broken soon.

4. Demonetization: The cost of deploying the new technology decreases, and the organization realizes that they should now offer products or services at a lower price. Internally, this could mean reducing margins, or cutting out costs. However, it also pressures the organization to find new revenue streams or value propositions as traditional profit margins shrink. Obviously no one wants to reduce price while the promise to shareholders is to increase margin. Price reduction results as a consequence of the market pressure, and it doesn’t usually happen at the right moment in time, in fact the timing sucks!

5. Dematerialization: The organization sees physical products or services being replaced by digital alternatives. This might lead to a reduction in inventory, changes in supply chain management, or even the elimination of certain departments. Internally, the focus shifts to developing digital offerings, reducing reliance on physical assets, and investing in software and cloud-based services. There is a redistribution of power.

6. Democratization: Finally, the technology becomes widely accessible, allowing new competitors to enter the market and customers to have more choices. Internally, everything is in chaos, after having a certain place in the market for years, organizations find themselves fighting to get recognized in the new market, with a majority of new staff (due to the impact of high turnover), isolated silos (people tend to freeze and shield themselves behind processes), everything is urgent, everything priority, there is no chance to fail, there is no time to learn or improve, etc… 

During periods of disruptions, traditional ways of managing (even the classic agile methods) just doesn’t work. Organizations that may have survived this kind of turbulence without making a mindset shift, or adopted new thinking, will drag the dystopian culture with them, thus prolonging its existence..

As Harry Styles sings, it’s a sign of our times… it’ll be all right.

I know until here you have probably pictured a bleak future, but there is nothing to worry about. In it’s place, there is a lot to unlearn and learn again.

As digital markets become the new standard for almost any industry, many organizations have developed new ways of thinking and operating. Let’s now take a brief review on what we can learn form those companies:

• Organization's can and must detect what they are facing and can diagnose these stages. This article and some previous articles intend to help organizations gain some awareness about the unknown topic of disruption.

•  Organizations can and must successfully undergo significant internal changes while maintaining structure and meeting necessary requirements. These organizations achieve this through having strong leadership, being agile (able to adapt quickly to changes), and being open to adopting new ways of thinking and operating. (we cover this in a future article about the 5 dimensions of agility).

• Organizations can and must adapt models from a competitive edge single focus to a more holistic approach considering multiple factors such as sustainability, social responsibility, and collective capabilities to drive long-term success.

• The advent of AI and advanced no-code automation frameworks has revolutionized the business landscape, empowering individuals to expand their capabilities beyond what was previously thought possible. This potent combination has given rise to a new state of the art in business management, where companies can harness the power of technology to drive innovation, efficiency, and growth. By embracing this cutting-edge approach, organizations can not only stay ahead of the curve but also create new opportunities for their employees to develop their skills and thrive in a world of constant disruption. Whether you're a business leader looking to transform your organization or an individual seeking to elevate your professional profile, this new frontier offers unparalleled possibilities for growth, innovation, and success.