Rather Than Waiting for Digital Disruption, is it Time to Disrupt Your Own Business?Posted by
Digital disruption is set to shake up every industry, so will your business fight against the tide of change or go with the flow?
The rise and fall of film giant Kodak has become part of corporate folklore but it still has plenty of lessons for businesses in all sectors that are lying in the path of digital disruption. What makes Kodak’s tale of woe particularly poignant is that, unlike many fallen incumbents once considered untouchable, Kodak actually had the chance to embrace digital disruption and revolutionise the industry, but instead chose to stick its head in the sand.
In fact, the digital camera was invented back in the 1970s by a Kodak employee, who was ordered to keep it under wraps because it clearly posed a long-term threat to the film camera market, which Kodak dominated. Kodak later tried to play catch-up, but it was too little too late and eventually it succumbed to the threat from more nimble rivals who had capitalised on Kodak’s folly.
Digital disruption doesn’t need to play out this way – not if your business is open to change, even if that means cannibalising your existing business to ensure your long-term survival in the digital age. For a great example, you need look no further than Netflix, one of the world’s most powerful content producers and providers.
Netflix began life in the late 1990s shipping rental DVDs in the post, back when the idea of watching high-quality video over the internet was still a pipe dream. Confident of its business model, bricks-and-mortar DVD rental giant Blockbuster turned down the chance to buy Netflix for only $50 million.
In 2007, Netflix delivered its billionth DVD, but rather than resting on its laurels, it decided to branch out into video-on-demand streaming services. In the long run, internet streaming posed as big a threat to Netflix as the digital camera did to Kodak, but rathering than fight digital disruption, Netflix chose to embrace it – knowing its new online offering would gradually cannibalise its old postal service.
Today, Netflix is a poster child of the digital revolution, whereas Blockbuster is yet another of the business world’s cautionary tales.
Digital disruption will bring a paradigm shift to your sector, so you need to decide whether you want to look backwards like Kodak or look to the future like Netflix. Embracing digital disruption might hurt in the short-term, but it’s better to do it on your own terms than to be disrupted by a nimble competitor hell-bent on putting you out of business by rendering your products, services or business model obsolete.