cfo-nz logo
Story image

Disruption – it's coming, ready or not

28 Apr 2020

Article by Applicable director, John Jones.

For years digital evangelists and futurists have been trumpeting ‘disruption’ as the philosopher's stone of business strategy, now suddenly the ultimate disruption has blindsided us and much of what was purely aspirational has become an urgent necessity.

The business landscape literally changed in a matter of weeks, as captured so well in Larry Elliott’s article for The Guardian titled, Blindsided: how coronavirus felled the global economy in 100 days. Individual experiences of it were wildly different though; for some businesses, it was as dramatic as going from millions in turnover to zero, while a few have thrived. 

Others have continued on a similar trajectory via remote working, but are nevertheless finding themselves plunged into rapid change. And it’s likely there's more disruption ahead as the waves whipped up by this storm rip back and forth through the global economy.

So, what can we expect as the world changes around us? History suggests opportunities will be out there. Life is likely to be harder for a time, but humanity doesn't actually stop. Some things cease, new things pop up. People's habits and perceived realities change, then a new normal ultimately emerges that everyone in that time considers to just be ‘the way things are'. 

There’s often real pain in change, but that doesn’t mean all of it is bad; many things may be done more efficiently and sustainably after this great disruption. Consider the following;

“Significant technological innovation often takes a decade or more to become mainstream ...Except when an external force suddenly removes the usual futurelag from society ...Fast-moving change not only disrupts, it accelerates useful transformations.” – Futurist Dave Wild.

In terms of specific change factors, one thing we’re already observing is that digital transformation is shifting into fast-forward. Whatever you think of remote working, doing more online, digital marketing and automation of business processes, the world is moving in these directions at higher speed than ever according to commentary coming out of the big consulting firms.

This increased rate of digital transformation means that businesses are likely to separate out into fast-adopters that embrace change, and that are part of envisaging and shaping the next normal, and those who drop away. This would perhaps be a less urgent concern if not for the fact that over the next couple of years we’re likely to be playing in a shrinking world market, at least if predictions by the IMF that we’re about to enter the worst recession since The Great Depression turn out to be accurate.

Predictions like this naturally make businesses inclined to tighten spending, however, in an environment of rapid change, it’s also vital to look hard at where spending money can create market advantage, lower cost structures and bring in new business. Certainly, nothing should be done without a solid business case, but doing nothing could result in a solid case for going out of business. 

New Zealand already has many world-class IT, software, integration and digital marketing agencies that are well placed to facilitate rapid transformation, so the key differentiator for many organisations is likely to be the degree of vision they display.

As just one example of vision overcoming adverse change, consider the response to recent COVID-19 disruption by EAP Services, a provider of Employee Assistance Programmes. Their face-to-face counselling services were stopped dead by recent events, but they soon switched to video calls and are creating an e-counselling platform, allowing the company to operate at any alert level.

So, as our government pulls out the stops to stimulate our economy it seems like a vital time for New Zealand businesses, not to develop either bunker or welfare mentalities, but to effectively utilise the breathing space these measures provide to prepare for further disruptions ahead. Our government’s COVID-19 elimination strategy means New Zealand may well be firing back up into economic life ahead of much of the world, with products that people overseas are likely to trust as pure and many opportunities for internal tourism. 

Overall there is definitely reason to hope. But for many it’s also a time where we’ll need to deeply re-evaluate things. Business plans, what’s really important to us as people, what’s necessary for a sustainable future. Disruption is no longer some mystical answer, it’s become the problem, but solving its problems may also yield many answers that ultimately help us thrive.