A New Disruptive Paradigm

By: Amelia Johannsen

Let’s face it, running a business in today’s world is a formidable endeavor: change and disruption have become the new norm. In an effort to keep up, innovation is at the top of every executive’s priority list and new innovation methodologies, training and strategies are available every day. But is all the hype really helpful while Western businesses and policy-makers are working under an outdated paradigm?

In his new book, Platform Disruption Wave, Haydn Shaughnessy says that modern enterprises need to explore a new way of doing business—one that embraces continuous improvement, self-learning, horizontal structures and diversified ecosystems, rather than individual achievement and the hero’s journey. If they fail to do so, the U.S. and Europe will start to see a major power shift to the East, and not in 20 years time—this process has already begun and the effects are at our doorstep.

Setting the disruptive innovation scene

The book provides a good overview of the history and influences of Disruptive Innovation and how the theory has helped human beings make sense out of capitalism. Shaughnessy explores numerous examples from the last 20 years, including the disappearance of the U.S. TV manufacturing industry; the emergence of open-source and free content for the masses; new currencies and the re-working of the financial services industry; the complete take-over of the smartphone and the app ecosystem, and many more.

Throughout this examination, Shaughnessy argues that a very restricted view of disruption has been detrimental to our strategy planning and to our economy itself; “…whereas five years ago we needed to understand platform strategy, we now need to understand its power to disrupt whole economies.” (Shaughnessy, 2016)

The book is divided into three sections, offering a fresh view of disruption, one that is in-tune with modern global business markets and their new transformative and interconnected nature.

Part I: Platform

Learn about the origins of service model platforms and their ecosystems by looking at the iconic architects: Google, Apple and Alibaba. An examination of their defining characteristics offers insights into their competitive advantages.

Moving on to today, how are platforms redefining what it takes to become a successful enterprise? By looking at how platforms broke through the scale barrier and enabled the offering of infinite choice and customization, we can better understand their profound affects on business today: real-time transactions, the disappearance of intermediaries, money management beyond traditional banking institutions, and more.

Part II: Disruption

Enterprise disruption fits into a broader economic, social, and geopolitical restructuring. To be good at handling disruption, executives need the bigger picture.

After reviewing the history and discrepancies amid disruption thinking during the last two decades, Shaughnessy asserts that by focusing on the new market trends and revealing the outliers we are distracted from the bigger question: can we comprehend the broader structural disruption that is currently taking place?

We are experiencing the platform as a disruptor. It is a completely new way of doing business and is capable of restructuring global trade and power structures.

Part III: Waves

An examination of how manufacturing skills and technology has transferred from the West over to Asia shines light on the ideological roots behind this process. The global market no longer belongs to vast corporations with limitless spending potential. Using Platforms, small companies now have all of the resources they need to act fast, reach a global market, and do so affordably.

China is enabling their middle class and small businesses to drive systematic innovations. “The shift China is exerting is not just toward unprecedented scale, nor is it just about extraordinary scope. It is also the shift toward an economy based around smaller enterprises, supported with the country’s new $338 billion venture capitol fund and 1,6000 incubators.” (Shaughnessy, 2016)

In the years to come, we shall see how China’s dominance of superior mega platforms as well as their growth and expansion into other continents will dominate and disrupt the world as we know it.

Wake-up call

The world is changing; ‘business as usual’ plus the implementation of innovation programs is not enough to keep companies afloat. The arguments raised in Platform Disruption Wave should be carefully considered if Western businesses are to remain as competitive players in the world economy. Their leaders should take into account the changing user needs and cultural identity, changes to learning and the information layer, mass participation, integrated processes, the rise of ecosystems, the appearance of new platforms, experimentation and randomness, horizontal growth—all of these factors are profoundly altering the “business as usual” part of the equation.

You can read more about Platform Disruption and waves of change in Haydn Shaughnessy’s recent article.

By Amelia Johannsen