by Mark Raskino | November 24, 2015 | Comments Off on In Digital Business persuasion, FOMO might be better than Disruption
Sometimes I think Clayton Christensen’s great work on disruptive innovation has become almost too successful. In recent years, protagonists inside companies, urging digital change, have come to rely on it too much. “If you don’t act, you will be disrupted!” they say. “Remember Kodak!” “Don’t get Ubered!”. I have used these arguments myself many times. They do resonate and they have moved boards of directors and individual CEOs to action. But sometimes that kind of messaging can backfire.
Today, many business leaders are confident of their ability to spot a digital threat a mile off. They have changed. They have now done their due diligence. They have investigated possible future business models. They have assessed and countered price comparison engines and other attempts to ‘re-intermediate’ their markets online. In many cases they have not yet have fully understood the way digital business could reinvent their products, but quite rightly, if someone comes into the room repeating old e-business style disruption risk messages, they roll their eyes. More disruption messaging can start to sound like an artificial attempt to create a “burning platform” story, in order to sell a self-serving vanity project. If the recipient of your message sees things that way, it could backfire. You might undermine your authority and set back your company’s digital business strategy.
So if you believe there is a compelling new digital business vision for your industry – what should you do? Well, perhaps it’s better to try selling the positive, rather than scaring with the negative. Right now we are coming towards the end of a business cycle. Growth is getting harder to find. Global M&A activity has reached its highest level ever – a sure sign that CEOs are hunting peer companies for growth, because they struggle to see opportunities to generate growth organically. If we want to grow existing markets, we need more customer demand. Innovation is always the spur for that. In our book Digital to the Core – we argue there is in fact a huge new opportunity in digitalising products themselves. Things like self driving cars, digital cigarettes, 3D printed mechanical parts and sensor enabled clothes will cause the next big wave of new value creation that customers will crave. And that is the alternative story to disruption fear – digital product greed. However the opportunities to digitally remaster products may not be evenly spread and not everyone in a market can win.
Digital products connect to clouds. Clouds provide services and those services form in platforms. The problem is, customers tend to want only a few strong integrated and standard platforms. Think about the market evolution of digital music and movie download, ebooks, search and social media. The number of platforms tends to reduce quickly to just 2 or 3. So those companies that move early can either define a platform, or negotiate good terms with those who do. There is a sense of “winners take all” with digital business, or at least that the early movers get the lions share of the spoils. That’s a good way to create a sense of urgency when motivating change. The returns from digital business could be very valuable- but only if you move quickly. There is some fear in that message – like there is from disruption. But in this case – it is called the fear of missing out. FOMO.
FOMO is a real motivator for the true entrepreneur. CEOs in particular, kick themselves when they see others take opportunities and make money from situations that they could have or should have spotted themselves. So rather than repetitively talking about the dark fear of digital disruption loss – wouldn’t it be better to sell the time-limited opportunity of the digital business big win?
In our new book Digital to the Core, Graham Waller and I explore what digital business really is, how every industry will be digitally mastered and how you can lead that change in your own organisation.
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