Customers first. Digital disruption explained by James McQuivey


Digital disruption: what is it? How does it affects publishing and ICT companies? How to take advantage of it? James McQuivey, vicepresident of Forrester Research, provides an overview on the topic.

What does ‘Digital disruption’ mean?

Digital disruption describes the collision that’s happening as consumers rapidly embrace new technologies to make their lives easier and companies of all sizes use those new technologies to offer people better experiences – better ways to bank, to read, to fall in love, to live their lives.

All of these things are accelerating so quickly that it’s breaking or disrupting the old ways that we used to do these things and it’s disrupting the ways that businesses operate. Companies that participate in this change will succeed, but those that don’t join in the disruption will find that they are no longer relevant to their customers.

In your book, you say that People + Infrastructure = Disruption. Could you please describe this concept of disruption?

In the history of disruption – a force that has been at work for many years – you have to combine people with the energy and vision to change things with the infrastructure for them to deliver their improved products and services to the market. In the past, railroads or highways created a kind of infrastructure that allowed the best makers of olive oil, for example, to export their goods to the world, disrupting the kinds of products that people could buy or would expect to buy. But physical infrastructure is expensive and takes a long time to build, so disruption has historically been slow. Under digital disruption, the digital infrastructure that companies like Apple and Google are building is relatively quick – Apple sold more than 140 million iPads in under three years, creating a kind of digital highway over which app developers could deliver new, satisfying experiences. So if people + infrastructure has always led to disruption, digital disruptors + digital infrastructure leads to digital disruption, a more powerful type of business innovation.

How does digital disruption affect the publishing industry?

Publishing is an industry full of traditions and habits. But it is also a very inefficient business. For ideas to get from one person to another, they have to be put down on paper, that paper has to be distributed to a bookseller, and then someone has to decide to buy the book and eventually receive the ideas expressed in the book. A digital infrastructure built by Amazon for finding books or by Kobo for reading books makes that whole process shorter and cheaper. Ideas can go from one person to another much more quickly and with much less cost and hassle. That creates an opportunity for new competitors to jump in and try to publish books.

 

How can publishers take advantage in this situation?

Just as it is easy for new competitors to try to participate in publishing, so it is also easy for publishers to do this themselves. Mondadori, for example, is partnering with Kobo to sell e-readers – to build the digital infrastructure that will enable cheaper and faster publishing. It will mean that the company has a direct digital relationship with its customers for the first time ever, a relationship that the company will eventually build its whole future on.

According to you, which are the fundamental tools and skills every business should have?

To participate in digital disruption, companies need to put their customers first, creating new value for them using digital tools and platforms. This requires making everyone in every company think of digital as one of the company’s most important goals. To do this, you must learn how to generate more ideas – more innovations – for your customer than you have before. Because if you’re not doing it, someone else certainly is, perhaps a small start-up or a large company from another industry that can use digital tools to get to your customer and take your business.

Why is it so important to put costumers at the centre of the business?

In the digital environment, customers have the ability to switch back and forth between competitive providers more quickly and at lower cost than ever before. They can research competitive prices, they can look for promotions, they can even place an order for a competitor’s product all while standing in your store or looking at your product on the shelf. That’s why the only way to win that customer is to serve that customer, to make his or her needs the most important thing your business is focused on.

An alternate version of this story originally appeared in Giornale della Libreria, June 2013.

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