Disruption or Distraction? Thoughts on New Technology and the Modern Business

Stephen Mulligan
On: 14 Jul 2016
Share this post

What can the international ice trade tell us about technological disruption?

More than you might think.

In 1910 the international ice trade employed well over 90,000 people. Millions of tons of ice were harvested from places like the northern United States and Norway, carefully packed and shipped great distances to hot, thirsty populations. Just 10 years later, this massive industry had all but disappeared, undone by the rise of mechanical refrigeration.

The story has an air of inevitability about it – new technologies squeezing out the old. But perhaps it wasn’t refrigeration that killed the industry; it was lack of imagination.

What’s amazing is that not one of those companies took their profit and invested in refrigeration technologies.

Think about it. They had the distribution routes, marketing and business relationships in place. They understood ice; how to generate demand and deliver a quality product. But as refrigeration technology advanced, and ice-production plants took an increasing share of the market, they simply stood by and watched while their business melted away.

Adopting a technology that threatens your central business offering is like “eating your own feet”. It’s not something to be entered into lightly, but sometimes, it’s the very smartest thing you can do. The trick is to take a measured look at the market, test it, and make sure that your business is still delivering what the market wants. You don’t necessarily want to jump at each opportunity; it can be dangerous to be the first. Sometimes you do have to take the risk, but if you’re going to go after something, it’s worth taking the time to evaluate whether an innovation is truly disruptive or merely a distraction that will draw you away from a more effective long-term strategy.

Some innovations which initially feel disruptive become essential to basic business functioning, social media for example. Others, like the Internet of Things (IoT) are still finding their footing but gaining traction rapidly. An example is a hostel network that worked with Three to deploy an app to integrate their on-site cameras with managers’ mobile phones; allowing them to monitor the properties for any maintenance needs. The point isn’t to deploy things because they’re new and disruptive, but to observe technology for opportunities to drive productivity and serve your market.

So you might say, business is the same as ever. Before investing in a new product or process, you build the business case. You make sure it all pencils out. You look before you leap.

On the other hand, back to the ice trade analogy, it took 20 years for their trade to disappear. Today, shifting customer preferences can transform a market in months. To adapt to this environment, even the most cautious business needs to embrace at least some of the agile principles that have shaped the tech sector. So, in order to thrive, businesses must continually evaluate, experiment and adapt. This level of disruption has fueled a democratic shift, because businesses have to give their customers exactly what they want, or they’ll get hammered in the market.

A pretty good framework for evaluating the next new thing is to ask yourself if it helps you meet your customers’ needs more precisely and efficiently? Does it amplify your own productivity? And does it seem like it’s going to stand the test of time?

If you answer yes to all three questions, it’s probably time to jump before getting stuck on an ice floe.