Wednesday, July 2, 2014

Cultural and Social Evolution on a Global Scale?

John Hagel on the disruption debate that's come in the wake of Jill Lepore's article in the New Yorker:
But, for the moment, these two forces – exponentially improving technology and economic liberalization – are combining to create environments that are increasingly vulnerable to disruption. In economic terms, they are doing two things. First, they are systematically and substantially reducing barriers to entry and barriers to movement on a global scale. Second, exponentially improving technology is offering untapped capabilities that can be a catalyst to fundamentally re-think business models and institutional arrangements.

Bottom line, they are catalyzing more opportunity for players to adopt new approaches that can be highly disruptive on three levels:
• The approaches render obsolete a significant part of the existing assets/installed base of incumbents
• The approaches cannot be effectively addressed without significantly cannibalizing existing revenue/profit streams of incumbents
• The approaches are driven by a fundamentally different set of assumptions regarding the drivers of value creation/capture relative to the assumptions that have driven the success of the current incumbents – they challenge the mindsets/mental models of the incumbents
And, because they are reducing barriers to entry and movement, they are increasing both the motivation and ability of players to pursue these disruptive approaches.

So, at a macro level, I'd suggest that these forces help to explain why we are experiencing more frequent and widespread disruptions on a global scale. (And, by the way, while my focus here has been on companies, I believe that all institutions are becoming increasingly vulnerable to disruption as a result of these forces).
H/t Alex Tabarrock.

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