Interested in Participating in the Disruption of the $17billion Business Intelligence Market?

by Laurence Lock Lee (SWOOP Analytics)

DISRUPT.SYDNEY™ has led the conversation on digital disruption to a point now that virtually all industry sectors can expect to face at least some degree of digital disruption in the not too distant future. Interestingly, there is one digital business sector, that consumes a significant proportion of corporate IT spend, that to date has experienced little change since first established in the 1970s. This sector is called “Business Intelligence” (BI), but should more accurately called “Business Reporting”.  With a catch cry of “one version of the truth”, the major part of the investment has been on trying to build reporting data warehouses across increasingly diverse sources of business operational data. The downside of adopting an aspiration term like “Business Intelligence” is that it provides a false impression that real intelligence gathering of the predictive type is happening, when mostly it is not.

Current Status Quo

We now know that the most prospective targets for digital disruption are areas where processes and technologies have been locked into a mature business and technical infrastructure. While incremental improvements are being made it is too little too late for the demands of a rapidly changing business environment. Gartner has recently flagged this emerging opportunity by differentiating a required “Modern BI and Analytics Platform” from the existing “IT Centric Reporting and Analysis Platform” as:

Table 1: High-Level Comparison of Traditional and Modern BI and Analytics Platforms

Analytics Workflow Component IT-Centric Reporting and Analysis Platform Modern BI and Analytics Platform
Data Source Upfront dimensional modeling required (IT-built star schemas) Upfront modeling not required (flat files/flat tables)
Data Ingestion and Preparation IT-produced IT-enabled
Content Authoring Primarily IT staff, but also some power users Business users
Analysis Structured ad hoc reporting and analysis based on a predefined model Free-form exploration
Insight Delivery Distribution and notifications via scheduled reports or a portal Delivery via sharing and collaboration, storytelling, and open APIs

Source: Gartner (February 2016)

Gartner’s characterization of Modern BI promotes a simpler business created intelligence gathering and use. Gartner speaks of democratizing analytics away from specialist IT departments and to the “owning” business units themselves. This is an admirable development, with IT specialists likely being replaced by specialist data analysts working in, rather than for the business. However, we believe the ‘real disruption’ needs to go beyond this. While moving the responsibility for BI closer to the consuming business is a positive change, it does not remove the need to employ specialist data analysts, especially if predictive analytics is desired. The proposed changes are unlikely to match the sorts of digital disruptive changes we have seen elsewhere and now become accustomed to.

The Digital Disruption Opportunity

We think that the fundamental opportunity for disrupting BI is not just simply moving the responsibilities from IT to the business. The current models for BI were established in an industrial age when manufacturing businesses and operational hierarchies dictated a like BI process of data capture, data cleansing, data filtering, data reporting and finally recommendations and actions. With the more dynamic and human-centered business structures of today, each stage of the current BI process potentially requires collaboration and shared judgement. With the explosion of data availability (big data), questions like which data should we aim to capture? how should we filter it? what can we infer from our analyses? and finally how can we execute the agreed actions?, can no longer be left to the ‘selected few’. We present here two potential disruption opportunities as a lead into workshopping what a disrupted BI marketplace might look like.

Disruptive Social Analytics Opportunity

One proposed model for a disruptive change to BI is to move the focus from the process to the people. Today the focus is on operational data with a secondary acknowledgement that exploiting insights will require sharing and collaboration (Gartner’s Insight Delivery stage). A people focus places conversations at the centre, with operational data simply an input. As data sources explode, it will be left to humans to collectively decide on what data and data quality is sufficient. Business outcomes are predicted more by the quality of the conversations, rather than the quality of the operational data they draw from. Importantly, insight delivery is not simply the last step in a linear BI process, but a continuous occurrence, as staff embed themselves in business and data centred conversations, on a day to day basis. Actions flow incrementally and continuously from such conversations. Learning and improvement is achieved through analyzing conversational data i.e. social analytics and resultant business outcomes.


‘Platform’ Business Disruptive Opportunity

A second and more common approach to digital disruption is the use of the ‘Platform Business’ model, commonly associated with businesses like Amazon, Uber and Airbnb. In a BI context, the Enterprise opens its data sources to an open community of potential data consumers. In essence we would not only be democratizing the consumers of data but also providers. The BI ‘Budget’ would initially be distributed to Enterprise consumers who would be free to use these funds to ‘pay’ for both internal or external data providers. Over time BI purchases would be absorbed into operational budgets, with data providers being able to earn their funds by servicing potential data/intelligence consumers. To do this they would have to market their data services on the platform. The platform itself would be configured to optimize the matching of data owners to data consumers. Providers would have the opportunity to provide value added services like data cleansing/filtering as demand dictates.


The platform would not only facilitate connections between providers and consumers, but also facilitate collaboration and co-operation between data providers themselves and data consumers themselves. In this way economies of re-use and sharing can effectively be achieved.

Other Ideas and Opportunities?

BI systems are arguably one of the last bastions for legacy industrial style thinking in IT. The explosion in data availability (Big Data) will ensure that the pressure for change can only accelerate. This is a $17 Billion market opportunity. Join this workshop to help shape the BI of the future.

If you are interested in discussing the future of BI in a world of social data come and join our workshop at DISRUPT.SYDNEY.

Digital disruption is not a dinner party!

Keynote at DISRUPT.SYDNEY 2015 by Antony Funnell (ABC Radio National)

Picture this – it’s 1966 – the northern summer – and a corpulent figure in bathing trunks is reclining on a divan in Zhongnanhai – the Chinese leadership compound that once formed part of the Imperial Palace in Beijing.

A decade-and-a-half earlier he’d become China’s paramount leader by embracing revolution.

‘Learn revolution by making revolution!’ he famously intoned – and so he did.

It was messy, destructive and often pity-less.

Revolutions are like that, after all, they sweep away the established, the outdated, the complacent – In a short space of time they transform. And things are never quite the same again.

So it’s 1966 and Mao Zedong is 73 and feeling threatened. He’s lying by his pool, reflecting on the numerous occasions in which he’s put the spirit of revolution to purpose: the times when he’s used it as a central tool of power – the defeat of the Kuomintang; the Great Leap Forward, the Hundred Flowers campaign.

Now, in the summer of 1966, dejected and slipping slowly into political irrelevance, he deploys it again – but this time as a rolling, ongoing reality.

And the Great Proletarian Cultural Revolution he unleashes, very quickly and brutally restores his power.

But it also all but destroys his country.

Oh well, he did warn people that it was never going to be a dinner party!!

I often think about Mao and the Cultural Revolution whenever I hear the term Digital Disruption because the latter also carries with it a zealous, almost ideological tone.

Much as the Great Helmsman and his devotees saw virtue in permanent revolution, there are many in the business, technology and media sectors who believe in the transformative power of ongoing disruption.

And in its name, companies, organisations, even whole sectors and industries are being upturned or swept away.

At least that’s the way the narrative normally unfolds.

But I think the reality is much more complicated than that.

In this presentation, I want to examine some of those complications… and take a look at a few specific examples of the way in which digital disruption is being used not just as a corporate weapon to bludgeon competitors, but as a means to greater engagement.

I also want to look at some of the problems around our understanding and use of the term digital disruption and indeed the broader issue of digital transformation.

And then, some thoughts on the impact of digital disruption on employment and the role government should play in order to ensure that we as a society, and as individuals, make the most of the continuing disruption that’s certain to occur and which we need to fully embrace.

But first, let me start by correcting a popular misconception relating to change and technology.

The term digital disruption brings with it a connotation of shock – the idea that industries, individuals and communities sometimes need to be shaken out of their torpor in order to embrace change.

We hear quite often in popular discourse the notion that if you want to enact change you have to make sure that it’s well explained, because people are innately fearful of it – and correspondingly – that too much change unsettles the masses.

I heard that exact argument trotted out several times during the recent political ructions in Canberra as the Abbott administration gave way to the Turnbull era.

Another thing that we’re also regularly told that the 21st Century is a time of dramatic, and almost unprecedented, change.

Well, maybe, but the evidence on all of those points, I would suggest, is much overstated.

Certainly this is a period of great technological and social movement, but I think if you cast your mind over the great sweep of time, you pretty quickly realise that the story of human existence is one of constant change and development.

It’s easy to look back on the past as though it was a quieter, slower time, but the truth of the matter is that technology and society have always been on the move.

I did a recent show on the demise of handwriting and the emergence of what US author and journalist Clive Thompson calls ‘voice writing’ – that is, writing and communicating via dictation and transcription software.

And one of the interviews I did for that programme was with a handwriting specialist and professor of design in the United States called Ewan Clayton.

After we’d finished taping, and while we were chatting, Professor Clayton mentioned to me how his 86-year-old dad had written him a letter every week for the past 47 years.

And what was particularly interesting to me was the way in which Clayton detailed his father’s changing relationship with technology over those decades – how his dad had moved from using a fountain pen and scraps of paper four-and-a-half decades ago through to his embrace of an iMac.

And how that transition has been smooth and relatively problem free.

The point is, change is the norm, not the exception in human life and people have, by and large – like Ewan’s dad – adapted to dramatic transformation in a remarkably accepting way.

Put simply, using tools to modifying our environment and, in turn, modifying our behaviour as a result, is just part of what defines us as human beings. It’s the reason why there are so many of us in every part of the planet – adapting to change is just what we do.

What this then means for the notion of digital disruption and digital transformation is that I think we sometimes worry too much about the pace of change and not enough about the quality of change.

Arguably, when people have bucked against developments, it’s usually been more about issues of equity and quality rather than nostalgia for the past.

I know lots of senior citizens who use tablet computers. I know of no-one – young or old – who still uses a typewriter.

Certainly change needs to be well explained to people. But if the change is universally good – and/or they perceive that it benefits the quality of their life – they get it. And they get it quickly.

Conversely, if it’s not good, if it diminishes their life, they tend to get annoyed or to get angry.

Now, while the term digital disruption is a useful one for helping us to understand what’s going on in our current world, we have to be careful not to let it obscure the fact that dramatic, transformative change often comes from within – that it isn’t always necessarily imposed from outside.

Let me give you an example of what I mean.

About six years ago I did a programme on the future of museums. This was at a time when there was a lot of concern being expressed by cultural institutions about declining relevancy given the arrival of what were being described as ‘digital competitors’.

Here are some of the things that I heard during that programme – that the museums sector was facing a threat from digital technologies; that audiences could disappear; and finally, that museum staff were conservative and would have to be helped through change.

And you could perhaps read ‘helped’ there as a euphemism for prodded and pushed.

Certainly, those were prevailing, pessimistic, but seemingly realistic views at the time.

But six or so years later and that’s not at all the way things have come to pass.

Today some of the most innovative uses of digital technology, I would suggest, are coming from the so-called GLAM sector – that’s Galleries, Libraries, Archives and Museums.

And one of the really interesting things about that sector is that unlike the traditional news-media industry which has basically embraced the digital world reluctantly as a desperate way of trying to stay relevant, the GLAM sector has been using digital technologies in a far less defensive way.

In fact, in an offensive or proactive manner.

Earlier this year I chaired a panel-session here in Sydney at the Remix Summit 2015 and my guests included two leading Australian museum directors – Kim McKay from the Australian Museum and Katrina Sedgwick from the Australian Centre for the Moving Image.

Now, both Kim and Katrina were very clear about the fact that they were, in effect, self-disrupting their organisations.

They didn’t use that inelegant description, of course – that’s mine – but that was the gist of what they were saying.

Both of them were actively engaged in rethinking and restructuring their institutions from the ground up, in order to maximise the potential they saw from digital technologies.

In both cases they described the digital world as a way of extending reach and relevance. And they talked about the necessity of adopting a ‘digital first’ approach, and not seeing the digital side of what they did as simply an add-on to their traditional means of conducting business.

And because of that change of approach in the GLAM sector, we’re now seeing some innovative and very successful initiatives coming to the fore.

Initiatives like the National Library’s terrific service called Trove, a free online library database aggregator which now gives people access to hundreds of millions of online resources from all sorts of places.

I can also tell you about an outreach service that the Queensland Museum is currently building which uses digital tools to connect indigenous communities, and communities in small Pacific nations, with the important artefacts that the museum holds in its vast storage vaults.

The idea with that particular project is not just to widen the institution’s audience, but to bring indigenous people into the actual cataloguing and curation process – using their traditional and cultural knowledge to better inform the Museum’s data-base and collection.

Or, let me give you an example from overseas – the work of leading archaeologist Mauritzio Forte in the United States who’s been reinventing archaeology to bring virtual-reality technology to the very centre of his discipline – not just as a means of enhanced display, but as a way of allowing for greater collaboration between professionals in different parts of the United States and in different regions of the world.

Collaboration that allows archaeologists to simultaneously interrogate artefacts and to build on each others expertise.

Again, what I think is interesting in each of these examples, is the way disruption is being used as a tool for reorganising and refocusing – and the change that’s going on in many parts of the GLAM sector is root-and-branch change brought on by organisations themselves.

Another simple and practical and perhaps unappreciated example of the way in which digital disruption has become a positive force for good is in the area of project funding.

Crowd-funding sites like Kickstarter have their problems – they’re not a magic panacea – but they have substantially disrupted and transformed the way in which people raise money for projects, inventions and causes – and crucially, they’ve made the raising of capital more inclusive by facilitating match-ups between those with a project that needs funding and those who want to fund a specific cause.

Over the past couple of years on Future Tense I’ve featured numerous inventions and new approaches which have benefitted directly from a crowd-funded appeal – everything from smart LED light-bulb systems to Solar-energy-generating glass roads to urban recreation areas.

So digital disruption has its upsides, and it shouldn’t, I believe, be seen just as a force imposed on organisations and industries from outside – it can be an empowering thing.

But I have to confess that I think the actual term digital disruption suffers from something of an image problem.

On the scale of technology buzzwords it’s not quite up there with 3D printing for overuse, but it comes pretty close.

Google the phrase and more than 41 million search options suddenly appear.

One of the problems I think with the term digital disruption is that it has a bit of a ‘bad boy’ quality to it.

And that’s its blessing and its curse.

It sounds edgy, unpredictable, rebellious even, and so journalists, PR types, futurists and those trying to sell business-related products, love to deploy it.

And they’re not particularly choosey about how they deploy it.

Depending on the spruiker in question, it can sometimes sound simply like systems upgrading, or it can sound like a forthcoming apocalypse.

Like Ebola, AIDS, Y2K and Islamic State – it’s coming to get us and to take us on a journey to hell.

Digital disruption, it seems to me, is used as often to scare, as it is to describe a state of change, or to motivate people to action.

And that’s probably not surprising given the sort of combative and aggressive language that’s often used when talking about digital disruption.

Dig around online for just a bit and you’ll soon find that lots of articles on the subject use words like ‘decimate’ and ‘penetrate’ and ‘destructive’.

Those are the sorts of words we don’t normally associate with a process that can be an agent for good.

They’re the kinds of words usually used to describe the likes of a military invasion.

And I think that’s unfortunate because words, of course, matter; and the wrong choice of terminology can act to limit our understanding of a process that can have huge social and economic impacts.

In one sense, it’s not the brand that’s entirely at fault here.

This has been happening, in part, because of the general decline of public discourse over the last ten years and, just as importantly, the hollowing-out of the serious news media.

Much of what passes for serious media analysis these days is light indeed, driven more by PR and sensationalism than by genuine investigation.

There is also a point to be made, I think, that much media coverage of technology and technological development, in particular, tends to be either superficial – an addiction to the shiny and the new – or informed by vested interest.

There is also a tendency to use the term digital disruption in a rather simplistic way that pits the new against the old, the sexy against the staid.

This is a form of representation particularly beloved of the media which likes nothing more than black-and-white scenarios and a good fight.

‘Sure disruptors might be brash and pushy and contemptuous of regulation’ – so the narrative goes – ‘but they’re new, unstoppable and somehow futuristic simply because they’re digital’.

Conversely, traditional players within a field or market are inevitably painted as tired, and old, and unable to adapt or adjust.

But this is a nonsense, of course. Experience should tell us that not all that is new is good, and not all that is old is bad.

In the field of education I know that many teachers bemoan the obsession of education departments and politicians with the ideal of the ‘fully-digital’ classroom and technology for its own sake. As though the deployment of gadgets should come before the establishment of educational needs and pedagogical priorities.

Where technology and educational imperatives come together best, from what I’ve seen and been told, is where appropriate digital technology is used to enhance recognised needs, or to counter recognised deficiencies. Not where classroom practice is twisted and moulded to fit the arrival of new devices.

Such simplistic narratives are annoying, but they often, as in the classroom example I’ve just given, ignore some very important considerations.

Let me give you another very topical example of what I mean.

Just think about the current stoush between the new poster boy of digital disruption UBER and local taxi companies.

Now, I have no great personal feelings for either protagonist. I don’t dislike traditional taxi companies and the service they provide (as many of my colleagues in the media seem to); and I can clearly see the appeal of UBER’s innovative ride booking app.

But let’s be real about this, that particular fight is hardly an equal one.

UBER isn’t just a sizable company, it’s a behemoth – a California-based multi-national, backed by venture capitalists – with a market valuation of somewhere around US $50 Billion.

And it uses its huge size, lots of lawyers and large amounts of lobbying and PR to simply flout existing government regulations and eventually wear-down its competitors and regulators.

And it does that, all while classifying its drivers as independent contractors so that it doesn’t feel the need to provide them with the sorts of work conditions and privileges expected in a country like Australia.

Spelt out like that, any thinking and objective observer might well come to the conclusion that digital disruption is not necessarily the path to a better future, but sometimes the return to a dark industrial and corporate past, where big companies do whatever it takes to monopolise an industry and effective regulation becomes all but non-existent.

There will always be losers as well as winners whenever there is massive transformation or disruption. The history of human development is the history of one technology replacing another, of one company replacing another, because it proves more attuned to changing customer needs and demands.

And that’s a good thing – after all, connecting to people’s changing needs is what it’s all about.

But surely, in an advanced social democracy like Australia, that kind of transformation should occur on a playing field that is as level as possible.

Our digital world is already worryingly filled with monopolists like Facebook and Google and Amazon – organisations that University of Maryland Law Professor Frank Pasquale evocatively calls the ‘Silicon Valley oligarchs’.

What a pity, one might think, if digital disruption simply becomes the window dressing to excuse anti-competitive practice.

Real competition – true competition – isn’t just the hallmark of good capitalism, it’s also meant to be the basis of social democracy.

In 2012 I was asked to give a very, very, very short graduation speech to students at Deakin University in Victoria.

They were communications and technology students. And I was encouraged to leave them with just one thought that might be useful for them as they embarked on their future careers.

One thought … no easy task for someone who likes the sound of his own voice.

Anyway, the theme I settled on was curiosity.

The world was too full of incurious people, I pontificated.

In a digital age where so much information is within our grasp, it is imperative, I said, that we make the most of it. That we don’t just let algorithyms, marketers and PR types dictate what we see, hear, and ultimately think.

Protect and develop your sense of curiosity, I declared.

If I could have gone to two thoughts, I would’ve also thrown in a line or two about scepticism.

I’m still constantly amazed by the number of otherwise intelligent people I meet who have absolutely no idea how a platform like Facebook, for instance, makes its money. Or how a company like Google operates.

No idea about how such corporations use people’s online data to attract advertisers. No idea.

Many of us are so in love with our gadgets and devices that we forget to ask even the most basic questions about who built them – and why – and who benefits from the way in which we use them.

I talked earlier about a misconception around people’s attitudes toward change. I think another misconception that exists in our society concerns trust.

No-one likes to think of themselves as gullible.

Many of us like to think that we’re street-wise, that we’re wary; that we know when marketers and politicians are trying to manipulate us.

But I would argue with that assessment.

If the digital world proves anything, it proves just how unquestioning and trusting we are of corporations and governments – and, for that matter, of well-executed advertising campaigns.

How else could one explain the actions of millions of people around the world who trusted the Ashley Madison website with the security of their personal information?

Much of what is sold to us about technology and the digital world is coloured by spin and marketing.

There are now many more PR specialists in a country like Australia than there are journalists.

And if you’ve ever watched The Gruen Transfer on ABC Television you’ll know that the marketing and advertising industry isn’t just big, it’s full of some very, very, clever people with very, very doubtful ethics.

Scepticism should be our watch-word.

So that when a large digital disruptor like UBER says it’s business is all about the ‘sharing economy’, our healthy sense of scepticism should then kick-in and remind us about UBER’s $ 50 billion valuation and also the reality that UBER drivers don’t ‘share’ their cars, they charge people to ride in them.

Or similarly, when we read Facebook’s mission statement and it says that the company is dedicated to giving people QUOTE ‘The power to share and make the world more open and connected’. We might also remind ourselves that Facebook only supports data interoperability with the services or platforms it owns or has a financial arrangement with – other than that, it’s not much into sharing, it’s very much a walled-garden.

Oh, and it’s worth remembering that the company’s turnover last year, according to Forbes, was US $12 billion.

Now, I don’t want to labour the point, but greater public scepticism is a must for ensuring that our digital ecosystem remains healthy, equitable and competitive.

I want to turn now to the role of government.

And I know this is an unpopular thing to say in some quarters, but I’m one of those people who believe wholeheartedly in regulation and the rule of law.

Not regulation for its own sake, I hasten to add, not bureaucratic red tape, but properly balanced and directed regulation that allows for individual growth, whilst also furthering the social good.

One significant factor that’s often overlooked in discussions about digital disruption and transformation is the role of government.

The central problem with the way in which government in Australia deals with the issue of digital disruption is that, to date, it seems to have had very little interest in digital issues at all. This is in stark contrast with the United States and many European countries.

The very first edition of Future Tense I compiled back in early 2009 dealt with the election of Barack Obama and the plans he and his confederates had for moving the government of the United States into the digital era.

At the time he was dubbed by many digital analysts as the first ever ‘internet president’ because his campaign the year before had shown how the process of voter mobilisation and campaign fundraising could be revolutionised through clever and coordinated online activity.

And on coming to office his administration began to put in place at a federal level, the sorts of e-democracy measures that had already begun to be undertaken by several innovative state and local governments, most notably the city administration in Washington DC.

Now, in the time since then, not everything has gone smoothly, but e-democracy or e-government as it’s also called is still considered an important direction for US government departments to support and undertake.

And agencies like the State Department have been involved in staff exchanges with large technology companies and with institutions like MIT.

In Australia, by contrast, over roughly the same period of time, the governments of Kevin Rudd, Julia Gillard and Tony Abbott collectively showed very little interest in any matter relating to science and technology, let alone the digital domain.

You might recall that during Julia Gillard’s tenure, the then Chief Scientist, Professor Penny Sackett, resigned in protest halfway through her five-year term, revealing that in all that time she had never managed to secure a personal meeting with the prime minister; and, prior to that, she had only ever been called upon to provide a briefing to Gillard’s predecessor, Kevin Rudd, on just one occasion. Just one.

But worse was to come.

When Tony Abbott took the reins of government in 2013, his first ministry contained no minister for science at all.

After an outcry from the science community, this was later corrected and the word science was tacked onto the Minister for Industry’s letterhead.

But it was done as an afterthought and only after protest.

Specifically, on the issue of the digital world and the digital economy so few politicians during the Rudd, Gillard and Abbott years showed any genuine interest in digital affairs that it’s possible to count them on one hand.

By my accounting, they were: Lindsay Tanner, Scott Ludlam, Kate Ellis and Malcolm Turnbull.

And I’ll come back to Malcolm Turnbull in just a minute.

In fact, the only digital initiatives that our politicians have really become exercised about in recent years have been data retention laws and mandating a digital filter for the Internet.

That’s perhaps an exaggeration, but I think you get the point.

However, all of what I’ve just said shouldn’t be interpreted as suggesting that there’s been a corresponding lack of interest in digital disruption and transformation within the ranks of the public service.

That’s not the case. There are, I know, many frustrated public servants who have for years been trying in vain to push matters digital further up the Federal Government’s priority list.

And Australia does now have a Digital Transformation Office and there are regular events like the Govinnovate Summit for those keen to explore digital opportunities and challenges.

But on any fair assessment, our national interest in matters digital has been lacklustre indeed.

What’s also been a cause of concern for many, has been the way in which the rolling out of a national broadband network has been plagued by political infighting and intrigue.

Which brings me back to Malcolm Turnbull.

Turnbull is a great user of digital technologies – famously – but as Communications Minister until two weeks ago he also had his fair share of critics.

One online article I came across last week screamed QUOTE – ‘Malcolm Turnbull was Australia’s worst ever Communications Minister’.

Which if true – and I’m not saying it is – would certainly make him an achiever, because there’s definatelyly been plenty of competition for that title in recent decades.

As we know, the Member for Wentworth is now prime minister, of course, so what can we expect from his government with regard to digital transformation?

Well, only time will tell, as they say, but it’s interesting to note that in his first media statement after winning the Liberal Party leadership and becoming Prime Minister-elect, Malcolm Turnbull made the following comment…

QUOTE: ‘The Australia of the future has to be a nation that is agile, that is innovative, that is creative. We cannot be defensive, we cannot future-proof ourselves. We have to recognise that the disruption that we see, driven by technology; the volatility and change, is our friend, is our friend if we are agile and smart enough to take advantage of it.’

So, leaving politics to the side, at least we now have a recognition from the top that these things are important and that our thinking and strategising about the digital future must start at the very highest levels.

And I’m sure many people were pleased to hear this week that one of the priorities of the new Turnbull government in Canberra with regard to matters digital will be to review the supportive framework around the development of Australian start-ups.

But, as I said, only time will tell how well the new government’s innovation, science and technology team of Turnbull, Christopher Pyne, Kelly O’Dwyer, Mitch Fifield and Wyatt Roy will perform in matching rhetoric to reality.

It was also pleasing to see yesterday that the Labor opposition has now seen the wisdom of providing greater support and emphasis to the start-up community.

But as one of my colleagues said to me on Wednesday, let’s hope both political parties don’t become fixated on start-ups as the only form of digital innovation.

The gold standard for digital innovation at a national level is Estonia – a small central European country that has taken a ‘digital-first’ approach to everything it does.

Not every country can, or would want to follow in Estonia’s footsteps. The size of its population and geography give it unique conditions, but the ‘digital first’ way of thinking that Estonians have embraced as a nation, is perhaps something that could be emulated here in Australia.

Getting the mindset right, I would argue, is always a necessary precursor for any successful change.

So the role of government in the age of digital disruption can be about leading transformation through example and encouragement, but it should also be about ensuring checks and balances.

And again, I make an argument here for the deployment of healthy scepticism.

How, for instance, does it help a nation like Australia if digital disruption simply leads to the diminishment of competition. In that regard, we have to be careful not to see digital disruption as an end in itself; to allow it to become a justification for the growth of a ‘winner-takes-all’ corporate environment.

UBER should be allowed to compete in the Australian market-place, and by all means let government change the regulatory structures in response to its entry. But they should be changed for the entire taxi industry, to make it a level playing field, not one that significantly advantages a digital disruptor over an established operator.

Secondly, we need to properly acknowledge the monopolistic tendencies of many existing digital disruptors and actively counter them. Facebook, Google, Amazon, they all dominate their areas of interest in a way that was once thought of as unhealthy.

In Europe, such dominance is viewed with concern by regulators, but in Australia we largely seem to have followed the ‘hands-off’ approach adopted by the United States.

As anyone who regularly shops for groceries in this country can attest, the dominance of one or two players in a field doesn’t always lead to lower prices and better service. In fact, quite the contrary.

On top of that, experience suggests that duopolistic or monopolistic control of a sector can sometimes hinder a company or organisation’s ability to be responsive to new disruptions and the need for change.

Using the supermarket business in Australia as an example, it has been pointed out by some economists and retail analysts that the duopoly enjoyed by Woolworths and Coles actually blinded them to the arrival of the online shopping trend – and the threats and benefits presented by that change.

We also need to be more realistic, I think, about the extent to which Australian innovators can compete in a world increasingly dominated by Frank Pasquale’s ‘Silicon Valley Oligarchs’. The notion that anyone with a good business idea and a little bit of backing can suddenly build a world-beating digital platform needs to be treated with caution.

The sheer size of US operators and their access to large amounts of capital will always be an impediment to local companies trying to make good in a digital world that is constrained by far fewer national boundaries.

Competition with international competitors has long been an issue for Australian businesses, but in the less regulated digital sphere, establishing a foothold, or holding the ground that you have, can prove even more difficult.

A case in point is the very successful Australian hotel-booking platform Wotif.

Wotif started its life 15 years ago as a digital disruptor and it grew fast while its competition remained largely local. But in 2014, the company’s owners effectively threw in the towel and sold the business to Expedia, because once the big international players got seriously interested in wining over Australian customers, the game for a much smaller domestic operator like Wotif was all but over.

How we as a middle-sized nation address that problem in future, I’m not entirely sure, but I know that we first have to acknowledge that the problem actually exists.

For my money, perhaps the most significant future issue that governments and societies will have to address around the continuing digital transformation of our world concerns what to do to ensure high levels of employment.

Disruptive technologies have always cost some people their jobs. The history of technological disruption since well before the Industrial Revolution has been one of job loss, followed by the creation of new occupations.

‘When a door closes, a window opens’ – that kind of thing.

For many years now that’s been the accepted wisdom about technological change in the workplace. And by and large that’s been true.

And we’ve been telling ourselves that scenario now for so long that it has almost a reassuring sense of inevitability about it.

But in the last couple of years we’ve seen the emergence of credible research into the employment impacts of automation that are worrying indeed.

Research from Oxford University published in late 2013 suggested that up to 40% of current US jobs would be automated away in a few short years.

While well-known US economist Tyler Cowen predicts the hollowing-out of the middle class in the United States as the result of a combination of both automation and the outsourcing of American jobs off-shore.

Now, when I interviewed them for my programme, both Professor Cowen and Oxford University’s Michael Osbourne, used the ‘old-jobs-for-new’ argument to give their otherwise gloomy message at least some positive dimension. Though they both readily conceded that they had no real idea where those new jobs would come from and what they would be.

But what if things are different this time around?

Just because new jobs have been created in the past doesn’t of itself mean that substantial amounts of new employment will be created in the future as a result of digital disruption and transformation.

In the modern world, when companies automate, they do so not just to improve efficiencies for customers, but to drive down their operational costs. And wages are a major expense for any organisation or company.

Does anyone really believe that when Kmart and Woolies decided to automate their checkouts, that they were doing so in order to create new jobs elsewhere?

That would seem to me naive, or at best, a wishful way of thinking.

Similarly when banks and insurance organisations closed branches and moved their businesses online in recent years, they weren’t at the same time thinking of ways to increase employment opportunities. The whole idea was about saving on wages and building costs.

I think we need to be far more realistic about the unique nature of digital disruption when it comes to employment. Digital operations decrease employment.

Think about it – giant digital companies like Facebook and Google and Amazon have far fewer people working for them than comparable-sized non-digital companies did in previous decades. Far fewer.

I’ve talked a lot about UBER during this presentation – I don’t mean to always single them out – but even UBER announced recently that like Google, they’ve decided to invest in the further development of driverless car technology.

Even UBER has a long-term ambition to get rid of its human employees.

For governments, whether they like it or not, addressing the employment impact of exponential automation is going to be a real issue as the middle class shrinks and the standard of living of ordinary people continues to fall. And it has been falling as we know even in rich nations like the US and Great Britain.

In such a situation, the setting of government imposed limits on automation simply can’t be ruled out in the future.

That may sound undesirable to us today, but in order to avoid the sort of social chaos that we know can arise from mass unemployment, greater impositions and controls on the digital world may well be demanded by a frightened and angry populous – particularly if inequality continues to rise in Western societies.

And just finally, if we’re talking about digital disruption for good; For the good of society as a whole, not just certain rich individuals, then I think it’s imperative that we be mindful of the sort of anti-government, anti-regulation rhetoric that is a feature of the digital world.

It is right that in a liberal democracy we should always be vigilant about the role of government in our lives and in business. But there is a tendency among digital operators to view regulation simply as an impediment.

One of the hallmarks of the digital world is that it had its birth in the counterculture movement of the 1960s and 70s. That was a plus – it gave an innovative and rebellious streak to digital developments in the 80s, 90s and the early years of this century.

But the digital world is now more corporate than it is counterculture, and attacks on regulators by the likes of Facebook, Amazon and Airbnb often have a worrying tendency toward naked self interest at best, and at worst, an almost Tea-Partyesque quality to them.

Neither of which, I would maintain, are positive forces in an equitable society.

In summary then, and before I open to questions, let me just run through the main points of this presentation.

The eight take home messages if you like. And they are…

We need to:

  1. stop selling people short when we talk about attitudes to change and acknowledge that the default option for most people is the embrace of change, not its rejection.
  1. recognise and acknowledge that organisations are not always victims of disruption, but that a disruptive approach can be employed by an organisation itself to refocus and drive growth.
  1. be careful of the negative-combative aspects of the term digital disruption. Avoid the simplistic ‘new’ versus ‘old’ narrative.
  1. be sceptical and appropriately questioning of the motives and statements of digital disruptors to ensure that the term doesn’t simply becomes window-dressing for anti-competitive practice.
  1. make sure that our politicians and leaders realise that strategising about our digital future needs to be led from the top if we are to make the most of the opportunities presented to us as a well-educated, rich society.
  1. ensure that the role of government in the age of digital disruption not only leads transformation through example and encouragement, but also ensures appropriate checks and balances.
  1. keep watch on the impact of digital transformation to ensure that it doesn’t simply lead to higher unemployment and greater inequity.
  1. be mindful that the rhetoric we employ around the online world and digital disruption remains inclusive and that it isn’t simply hijacked by vested interests and those espousing extreme anti-government/anti-regulation views.

I began with Mao Zedong and his famous quote about the power of revolution, let me just end by paraphrasing a more subtle and familiar Chinese proverb – ‘may you be cursed to live in interesting times!’

The challenge of our time: Getting collaboration experts to collaborate!

by Cai Kjaer

It seems that everyone is talking about collaboration these days. Recently I spoke with Natalie Slessor who heads up the workplace strategy team at Lendlease. She told me that increased collaboration was one of the primary drivers for organisations moving into new buildings or those refurbishing old ones. Physical space is important to enable collaboration.

Another good friend of mine, Allan Ryan, runs the Hargraves Institute. Hargraves is a membership-based organisation that focuses on innovation and uses collaboration between members to accelerate this, and US Professor Andrew Hargadon says “Entrepreneurs and inventors are no smarter, no more courageous, tenacious, or rebellious than the rest of us—they are simply better connected”. Innovation and collaboration are linked.

What about organisational performance? Isn’t that what collaboration is about? That is also true. According to a recent report from Deloitte Access Economics called ‘The Collaborative Economy’, the return on collaboration is staggering. It is saying that those companies who are great at collaborating are twice as likely to be profitable and twice as likely to outperform the competition.

Using the analogy of a peloton (the main pack of bike riders in a bike race) collaboration makes a lot of sense. Riders in the peloton save up to 40% in energy by collaborating and staying together as opposed to riding alone. Not surprisingly many organisational initiatives these days are about enabling cross-organisational teams to collaborate.

But why is collaboration such a hot topic right now? In my view it is because we have realised that we’ve come as far as we can through optimising, automating or outsourcing business processes (while we wait and see what the future of robots will entail), and now we’re faced with the most stubborn of problems – actually getting people to work together.

Achieving great business outcomes depends on people actually collaborating, but the ingredients for collaboration are multifaceted. It’s about culture, technology, practice and physical space. I think all of these individually have progressed tremendously in the last 10 years. Increased bandwidth has enabled us to work together in ways we never been able to before. Workplaces are transforming into collaboration hubs where we can get together physically and innovate. In my own experience I am also seeing a much higher level of awareness of the cultural aspects. Many of our clients have embarked on collaboration initiatives and they make a conscious effort to include culture and practice aspects in these initiatives.

What seems to be missing is a tight integration of these various facets. I think the real problem is that those who are working on improving collaboration aren’t collaborating. Too often I see examples where the IT team is introducing new wonderful technologies, the property team is arranging new state-of-the-art activity-based fit-outs, the LD function is training in ‘Agile Project Management’ etc. All of these are excellent in their own right; however, only rarely do they incorporate each other.

Agustin Chevez and I are doing our bit to change this. We have been working in separate fields for most of our lives. Gus is an architect, lecturer, workplace strategist and internationally recognised researcher. I specialise in the mapping of organisational social networks and have built both a consulting practice and a product business based on knowing how to translate social network analytics into business outcomes. But we’ve realised that our fields must work together, and we now collaborate in the intersection of workplace and social analytics (wouldn’t it be nice if we could demonstrate that a new physical workspace leads to better collaboration?). Applying a more integrated perspective on workplace and social analytics have led to new partnerships working with architect firms such as dwp|suters and HASSELL as well as industry giant Lendlease.

Let that be my challenge for you if you are working in one of the many spheres of collaboration: Start collaborating with those in other fields. It is amazing what it can lead to.

Gus and I hope to see you at our workshop at DISRUPT.SYDNEY 2015 where we’ll share more interesting and fascinating insights about collaboration.

Sketch-noting the Disruption


We’re delighted to announce that will be joined by Blair Rorani who will be creating sketch notes throughout the day to capture moments that will extend the ideas in ways that photos of slides and tweets just can’t quite represent.

Blair will be using his iPad to create these visual notes and will be available throughout the day to share his approach and demonstrate how to develop your own visual notes.

Visit to learn more.

The Force of Work

by Kristine Dery

Travelling through Mazentunnel[1] airport last week was one of life’s challenges. And not in a good way! The elaborate technicalities of corridors, escalators, rooms within rooms, and doorways means that the traveller is constantly being spatially tested and often found wanting. Seemingly to resolve this complex maze and prevent too many passengers being found at the end of the day still wandering aimlessly in the terminal, Mazentunnel have placed people at strategic points to direct the people traffic. For example there is a very stern looking person at the bottom of the escalator routinely pointing upward, just in case you were of the mistaken belief that the moving stairs, angled toward the ceiling, might go in another direction.

Fortunately, Mazentunnel Airport Corporation also thought to place a person (also non-smiling) in the bathroom to raise either their left or right arm to indicate which door you should take. Not a service I have ever before considered helpful, but there it was. Too bad, however, if you wanted to know which gate your flight was leaving from and where to find it, or needed to solve a more complex problem that often plagues travellers at international terminals. There were screens, automated kiosks, mobile applications or long lines at the Information Desk for more complex problem solving. Mazentunnel clearly felt the need to populate rather than popularize

Our latest research at MIT CISR suggests that we are essentially making one of three choices when we think about how work is done. We choose to either use (1) internal resources, (2) external providers, or (3) machines. Most work in large corporations is still carried out by people employed internally. While they may be engaged with automated processes, the work still requires significant human interaction. Increasingly, we are looking to external providers to outsource, contract, partner or form other types of associations to better manage the human talent, skills, and time that we need to augment or substitute internal work. The third choice is to replace human workers with digital applications or robotics. We refer to these choices around which mode is used to deliver work as as the “Force of Work”[2]. Allocating the way work is done to each of these modes has significant impact on both customer value and employee engagement in the digital era.

Digital environments are complex. We expect more from companies that we deal with than simply isolated products and services. Instead we are looking for end-to-end solutions to meet our individualized needs. Our on-line interactions are no longer based on one off transactions, but rather we expect a relationship that offers us informed choice, add-on products and services, personalization, and ease of purchase. In addition to all of this we want these capabilities to be delivered in a mobile, interactive, attractively designed format and we anticipate that the companies we deal with will maintain an on-going, pro-active relationship with us using digital capabilities to remember who we are and to recall our transaction history. This in turn raises our expectations around human interactions.

So when it comes to making those critical decisions around how work should be done, it is not only the task itself that we need to consider but also the way in which we deliver human interaction. Robots can often perform tasks better, faster and cheaper than humans can perform them. And robots actually seem to enjoy doing them (as opposed to those at Mazentunnel).

However, this means that when the customer does receive human touch, they expect this to be more skilled, more responsive, and more flexible and nuanced in solving complex problems. Companies that are experiencing higher levels of customer loyalty and satisfaction, are not simply tipping old tasks into new buckets of delivery. Rather they are re-thinking how end-to-end customer service is delivered and re-designing these processes and service around the capabilities in each of the three modes.

To do this they must: (1) amplify the voice of the customer to understand in real-time what they need to deliver, (2) dedicate senior management resources to decide how work will be organized, and then (3) implement a systemic learning process to constantly re-evaluate the best way to deliver quality customer focused solutions.

While companies like Mazentunnel continue to re-shuffle organizational charts to manage their Workforce more effectively, others are re-charting their organisation through the Force of Work.

Blog post written for DDRG by Dr. Kristine Dery, Research Scientist for MIT Centre for Information Systems Research (CISR) and leader of the Digital Workplace project. To follow Kristine and find out more about this research go to @kristinedery on Twitter or

[1] Clearly not the real name of the airport. Pseudonym used in this case but, honestly, could be most airports.

[2] This term was developed by the CIO of one of the companies in our study and has inspired us to examine it in more detail.

Robots, Work and Looking in the Mirror

by Ella Hafermalz

“With flexible rosters, firm boundaries, and the occasional correction of mistakes, the job gets done to my satisfaction.”

A typical scenario of managing casual employees? Not quite. I’m talking about dealing with Roomba, my new robot vacuum cleaner, which is sent off to the nether regions of my house in search of dust and debris. It’s a great addition to the household, but it’s also caused me to reflect. Why is it so easy to compare a robot to an employee?

We are fascinated by robots at the moment. With a flurry of films featuring the jerky movements of lovable, loyal, complex and terrifying androids, it’s evident we are trying to figure out what place these bots will have in our homes, work and society. Will they defend us from criminals, or become the aggressors (Chappie)? Will they care for us when we’re old (Robot & Frank)? Become our intimate partners (Ex Machina)? Or our oppressive masters (Robot Overlords)? Amongst all this hype of what could be, it’s easy to look past the current state of affairs.

There is a theory based in psychoanalysis which argues that scary movies reveal what society is repressing. Film theorist Robin Wood says that “the true subject of the horror genre is all that our civilization represses or oppresses”. Such films let us deal with a fear that is too close to home by disguising the threat as something else. In the 1960s, alien invasion movies related to paranoia about the spread of communism. In the 1980s, the painful transformation in The Fly drew on the fear of AIDS. So what does our fascination with and fear of robots tell us about our current society? In watching robots ready to rise up and give us a hard time, what is it we’re trying not to think about?

Here’s where Roomba comes in. The fact that the way I treat my robot vacuum cleaner sounds familiar to many of us, particularly those who have worked in retail or hospitality, might give us pause for thought. The casualization of the Australian workforce and increase in insecure, fixed-term contracts over the past five years has contributed to many workers being considered replaceable resources. They just need to be programmed for a weekly schedule, shown the rules, and turned around if they tip themselves over. If the stumbles and mishaps occur once too often however, or if productivity slows, just swap them out for a new model.

While casual workers are increasingly staying with the same employer for longer, “they are still used instrumentally and strategically by employers in ways that permanent employees are not”. A newer aspect of this is the new jobs of the sharing economy – where casual staff are on call to tick off your to-do list and pick up your dry cleaning. Maybe the robot films and Artificial Intelligence hype reveal something about our discomfort with this state of affairs.

When workers are treated like things that can be replaced, we de-humanise ourselves. Not only does it make our workforce more susceptible to automation in the future, it means we are treating each other like machines now. If we favour mechanistic management over meaningful relationships and work is reduced to a set of tasks, it’s no wonder the monster-figure of the robot is tapping us on the shoulder.

But the robot isn’t threatening us with lasers and bullets, it’s holding up a mirror.

VR ventures into the world

by Mike Seymour (@mikeseymour)

It is said that you need the ‘right’ tool for the job, but sometimes a tool can find the ‘right’ job.

VR or Virtual Reality is being hailed as a huge break-through for entertainment and games, especially with the up-coming release of the new Oculus Rift (Crescent Bay), Valve’s Vive and the new Sony Morpheus. There are enormous amounts of research funds being thrown at this cutting edge technology, with most of the biggest players in Silicon Valley and the film industry looking to use this new shiny high-tech tool.

At DISRUPT.SYDNEY in September, Skip Rizzo from the University of Southern California will present his team’s work on using VR for helping with post-traumatic stress disorder (PSTD), as well as equipping those who are going into war zone with the emotional tools needed to deal with the stress and horror of war. This is proving to be an incredibly effective and powerful use of VR.

This remarkable research from the dedicated team at USC’s Institute of Creative Technologies builds on the ground-breaking and defining work of Marc Bolas and his team in developing VR for the last 20 years at USC. Collectively, this group of people from multiple disciplines has been building the field and creating the future by not so much using the latest tools as inventing them.

It is easy to see why some people think the best use of a new disruptive technology is just the chance to do what we have done before but in a new way. For example, TV was initially seen as a great way to have televised radio plays, in almost the same way, we have seen commentators jump on the simple idea of VR providing ‘immersive movies’.

The USC ICT work shows how completely different ideas and applications can be found once you actually experience the new medium and explore its potential. With men and women returning from both years in Iraq and also Afghanistan, the effort to help these people return to their lives and cope with the realities that they had to experience – via professional high tech therapy – may not be the first thing that comes to mind when one hears about VR, but once you experience it, the application of immersive PTSD therapy seems not only valid, but truly compelling.

This need to both learn from experienced professionals as well as experience something first hand is why, in addition to Skip’s insights, the Digital Disruption Research Group will host a workshop with a range of current VR solutions from Oculus Rift to Gear VR and cheap accessible solutions such as Google Cardboard. The team will also explain in easy to understand terms the actual tech behind the newest Lightfield VR solutions just shown in LA (but still unreleased) from the leading graphics conference SIGGRAPH.


The world of VR encompasses immersive head gear experiences such as Oculus Rift and also extends to augmented reality (AR), which is mostly identified with Magic Leap and Microsoft’s HoloLens. The difference is best illustrated by Google Glass and Magic Leap’s as yet unreleased newer devices. The ‘screen’ of data on the now discontinued Google Glass moves with your head. It is fixed in relation to your eye. The data or overlay of information in the Magic Leap headset will track with the world. This second approach allows for a digital chess board to ‘sit’ on a table in front of you and stay fixed relative to the desk as your head moves – very much unlike the Google Glass display. The idea of mixing computer images on top of your world but locked in sync with real surfaces is expected to be 3 times larger than even the VR explosion. It is easy to see why companies such as Microsoft, Google and Facebook have invested over $3 Billion dollars in this new tech.

Clearly, the landscape of VR applications is a wide vista of opportunities of how this disruptive technology and these coming innovations will find markets and meet needs beyond just being a new ’tool’ for the movie or games industries. Come and help find the new ‘right’ problems – September 25th at DISRUPT.SYDNEY 2015.


Digital Disruption… How ready are you?

by Scott Ward (@wardsco)

Many years ago I watched a young woman attempt her first bungee jump. The cord was strapped around her ankles and she’d shimmied to the end of the wooden plank and was ready, waiting to jump.

There she stood, staring into the unknown, one hand on the railing as the crew counted down:

“Five… Four… Three… Two… One… Bungee!!!!!”

Her body motioned toward the emptiness yet nothing happened? She remained firmly on the plank!!!

“Fail fast” is the modern mantra, yet most organisations are incapable of doing it.

For most companies failing is a taboo… People are promoted for their successes; remuneration structures recognize our achievements; processes demand business cases; and hierarchies are full of people who, one way or the other, “made it work”.

Yes… Failure is frowned upon within the modern organisation. Yet we live in a landscape where the willingness to fail is the defining component to adapt and survive. The painful truth is that most companies are not set up to fail, which means most are inevitably going to shrink or become extinct.

Like with bungee, jumping into the digital realm requires a leap of faith; faith that the ideas and intuition you hold today will yield value at some point in time… Faith, that if you are sincere enough, set your priorities well and are willing to expose your flaws and can muster grit by leaping into the unknown; your feet will feel that sense of solid ground on the other side of the stream.

There are no consultants that can do this leap for you… it’s a heart-in-mouth experience for all: requiring leadership and courage.

Digital disruption is profound… its not just changing how we connect as individuals, it is altering how we function as organisations; how we spot opportunities; organize our resources; and how we execute on those opportunities.

The emerging business world is connective, intelligent and adaptive.

As one dear friend told me “this shift is the largest realignment of industry since the Second World War”.

So my challenge to you is “what are you doing about it?”

What the woman on the bungee board hadn’t realized is that, despite doing all the preparation she could to ensure a safe bungee, her hand had clenched in fear to the railing and was not letting go for love, nor money.

For a brief moment afterward, she stood, looking around mystified as to why she was still on the board. Her feet were tied, she was on the precipice, they’d counted down and in her mind she’d launched…

The woman in question looked back at the crew, saw her hand and started to laugh. The crew again counted down, and this time she leapt…

So I ask you:

Are you taking the leap? Implementing the structures that will allow failure in the smartest way possible? And then taking action that will enable you to master this disruption?


Are you clenched to the railing, asking for business cases? Having meetings? Spending time in endless workshops?

Yes! there is a need to plan… Yes! there is a need to educate yourself on the shift that is occurring around us… Yes! there is a need to do everything you can to minimize risk and increase your chances of success.

But if you are still standing on the precipice, yet to take action, ask yourself:

Where are you Really up to? How long has it been this way? And at what point do you plan to do something about it?

Join us for DISRUPT.SYDNEY on 25 September 2015 and take the leap!

Why it’s so hard to react to disruption – the VIRUS model

by Kai Riemer

When it comes to Digital Disruption, one of the most vexing and important questions is:

Why do incumbent businesses have such a hard time dealing with digital disruption even when it unfolds right in front of them?

Drawing on my work and experience in this field I have distilled a number of important factors into a framework, which I name the VIRUS model. The acronym emerged conveniently from the process of isolating these factors, but carries a deeper meaning: It captures the ways in which the disruptive product or service is able to emerge slowly, steadily and unrecognised – when symptoms are first noticed by the wider market, it is often too late, and full-blown disease strikes.

VIRUS stands for: Visibility, Information, Risk, Utility, and Speed. Each of the factors are explained below.

VISIBILITY: Can’t fight what you can’t see.
Despite what the name suggests ‘disruption’ doesn’t happen suddenly. The disruptive technology, product or service usually has been around for a while before it unfolds its disruptive potential. Why then do we frequently (dis)miss it? Because the disruption typically doesn’t make sense initially; incumbents literally can’t see the disruptive potential in emerging ideas. This is because disruptive innovation is revolutionary, not just evolutionary, it is path-breaking – it challenges the background on which the industry is currently understood. Therefore it appears as irrelevant, as a niche or fringe product initially. Yet, the disruption happens when it brings about a tectonic shift in understanding of what counts as a valid product, which can catapult the disruptor from the fringe to the core and the incumbents to the margins in a very short period of time.

Think of mp3 and CDs, or the iPhone and Blackberry/Nokia – initially dismissed as fringe products they have redefined the very idea of what counts as music media or a mobile phone – a fact that appears self-evident in hindsight but not while unfolding. Neither the first generation of mp3 players, nor the initial iPhone were a great success, yet both have disrupted entire industries, relegating previous incumbents to the fringes. The problem is to know before the fact which of the many (sometimes competing) emerging ideas will have that effect.

INFORMATION: Information rules!
Software is eating the world, according to Marc Andreessen. Digital Disruptors change the nature of competition in many industries from a dominance of physical assets (hardware) to a business dominated by software and digital information and data. Digital Disruptors are ‘Information First’ businesses; they change the rules of competition by becoming very good at working with data, collecting and exploiting information to add value to the industry. They turn physical into digital industries. Because of the very different nature in their business model, these emerging ideas are easily misunderstood or dismissed initially.

Both mp3 and the iPhone are good examples of this, mp3 has turned a formerly physical into a digital product. The iPhone has redefined the mobile space from a hardware to a software dominated one. Further examples are Uber, Airbnb, Yelp or Tripadvisor all of which redefine business not by owning the physical assets in their respective industries, but by redirecting customer allocation and value creation streams by exploiting information and data in innovative ways.

RISK: Risk adversity is the greatest risk.
Incumbent businesses become hamstrung by their own success. In stable markets, asset exploitation, efficiency and compliance through process optimisation and risk management through rigorous budgeting processes all make sense and underpin success. However, when markets are disrupted those traits become the greatest risk. When faced with a disruption those structures make it hard to innovate and change, all the while the existing business acts as a powerful disincentive to necessary self-disruption. First, there is the fear of self-cannibalising what is still a profitable business in favour of a new way of doing business that is not yet proven to work. Second, internal incentive structures are built on the old way of doing business, the risk of which is that people will not be inclined to get involved with something that doesn’t add to their KPIs, leading to the “not involved here” phenomenon. Finally, budget processes are based on rigorous cost-benefit analysis; yet benefits are foundamentally unknowable when it comes to disruptive change (as I have argued previously for the NBN example). Risk adversity becomes an inhibitor of the capacity to innovate internally.

Take Kodak for example: Kodak had all the technology and patents to be a leader in digital photography, but could not pull it off for the above reasons.

UTILITY: Different, not just better!
Clayton Christensen in his work on disruptive innovation has argued that new products or services initially start out as inferior to the incumbent product, which makes them appear harmless in the short term, but that they eat away at and slowly emerge as a powerful and disruptive alternative to incumbent products. So, initially the product’s utility appears inferior, but later it’s not. My point is that the change that happens is not just one of linear improvement, but a subtle, yet radical change in the understanding of what counts as utility in the market in the first place. Disruptors are not delivering an initially inferior, then better solution – in essence, they do something different and thereby, over time, redefine the rules of the market. Once this tectonic shift in what counts as utility happens, their product appears as vastly superior – but only on this new understanding.

Take mp3 again – initially it appeared inferior in terms of sound quality to the CD (it still is by the way!). But our understanding of music consumption has changed fundamentally. When the original iPod was released many people asked “what do I need 1000 songs in my pocket for?”. Today we take mobile music consumption for granted, with streaming of anything anywhere a given reality – this marks a tectonic shift in what counts as the actual product!

SPEED: Late but slow…
This last one is the accumulation or outcome of the previous factors. Once the digital disruption is widely recognised within an industry the disruptor tends to have a strong head start on the incumbent players. And because of the inertia of existing business, the shift in perception of understanding, and the ways in which internal structures tend to hamstring the incumbents, reacting to disruption becomes an uphill battle. Remember: disruptors not only came earlier to what is now a different market environment, they are also quicker in execution…

My thanks goes to all colleagues in the Digital Disruption Research Group, and in particular Ben Gilchriest at Capgemini, all of which have inspired and contributed to these thoughts through joint work and discussions. This article was first published on my Research Blog.

Gamification as an assessment tool: why play the game?

by Ella Hafermalz and Kristine Dery

We asked those attending DISRUPT.SYDNEY on Friday (26 Sep 2014) to pose questions relating to gamification ahead of our gamification debate. In a nutshell our attendees wanted to know, what’s beyond the hype? i.e. Is gamification just a new buzzword around digital? Is there anything different here beyond the delivery? Does gamification really add value?

In this post we move beyond all the bells and whistles and try to open up the discussion about gamification warts and all. To do that we have focussed our attention on gamification as a useful assessment tool in the context of e-talent management. We discuss here how gamification might be a useful tool for engaging talent in recruitment, training, and skills assessment.
Gamification refers to applying game elements and game thinking to traditionally non-game processes. These “games” are a growing addition to the e-talent management tool kit particularly now that more assessment tools are delivered on-line. Attracting the right candidates, assessing the best talent, and then recruiting them has traditionally proved challenging and expensive. Increasingly organisations are turning to gamification to deliver the elements of fun and competition that attract and retain the attention of their future talent.

L’Oreal, for example, have created the serious game Reveal to help attract and select top talent. After signing up to the game online the candidate navigates through various simulated departments of the cosmetics giant performing tasks and overcoming challenges. If the candidate performs well in a particular department they are advised to consider a career in that area. If performance is exceptional (placing you on the game’s leaderboard relative to other players) L’Oreal’s talent management team deliver further rewards with offers to engage in their recruitment process. This and other serious games and gamified processes that are designed to attract, assess, train, and retain talent are often developed on the basis of psychometric testing principles. Testing talent can be useful, but it’s important to first understand what the data generated from testing will be used for.

As we enter the Talent Decade, organisations will rely on their HR function to build ‘effective talent systems and measurement tools’ that will ‘support strategic business decisions and strengthen workforce capacity’ (Canadian Conference Board, 2014). This is where gamification has a potentially important role to play – in the intersection between talent systems that determine the desired characteristics and capabilities to meet strategic goals and the measurement tools that assess current and potential talent.

Reveal and other talent games like it are essentially tools for assessing talent more effectively. Gamification, therefore, is essentially a way of telling a story around data. When a candidate plays Reveal they are generating data. They receive data in the form of feedback, and data is collected to assess their performance. The game is the story that helps to order that data in a way that enables the employer (or potential employer) to understand more about the “player” and make more informed decisions based on information that they would otherwise find very difficult and expensive to attain. The “player” is experiencing the story of the game, which while engaging them is also providing them with insights into the organsiation enabling them to make decisions around whether they want to continue or opt out of the “game”.

As industry professionals start to experiment with gamification, it’s worth understanding more about assessment. Education specialists have a long tradition in examining assessment so perhaps it is worthwhile taking a look at some of their frameworks to get an idea of what lies beyond the “game”.

Education specialists focus on three main types of assessment  diagnostic, formative, and summative. Each type of assessment has a different purpose and is carried out at a different stage in a learning process or, in the case of talent management, a selection or development process.

Type of Assessment

Stage of Talent Management process

What is it used for?


Attraction and enrolment in the selection process

To assess a candidate’s current capabilities and identify their potential for the role or the organization


Activities and tasks during the recruitment  process to enable the candidate to display their capabilities and learn

To give real-time feedback on performance to enable both the candidate and the organisation to understand more about each other and assess whether to continue


Sorting and ranking at the end of the recruitment process

To measure achievement and inform ranking decisions

Games such as Reveal are good examples of how to incorporate more than one type of assessment and to integrate these across the entire gamified recruitment and selection process. Reveal has a diagnostic element because it tells candidates where their aptitude lies. It is formative because candidates learn about the skills needed to succeed in the L’Oreal environment. It is also a summative assessment tool, because performance data is used to select and contact high achievers, who then go to the next ‘level’ of the recruitment process.

Not all gamified talent management applications need to be this sophisticated or comprehensive. Some gamified processes focus on one assessment type. For example, KPMG use their game as a formative process to provide training on the capabilities located within the organisation throughout the world, Deloitte are building leadership training apps using gamified strategies. These examples of gamification are designed to engage staff in the mechanics of games to stimulate learning processes through fun interactions and competitive missions. They provide a degree of feedback to the “players” to indicate the retention of new skills or knowledge, and they might also generate data to further manage the game itself. However, there are no major implications for the player at a summative level and results are typically not used to rank or rate the player in a way that has consequences for their job.  

Gamification can also be designed purely for summative assessment where there are winners and losers. This is the area that has occupied the recruitment space for some time. Typically on-line application systems where CV’s are uploaded and sorted according to key words fall into this category. Candidates search for unwritten rules to play the game to make it through the diagnostics where they are quickly assessed and ranked. There may be a few iterative loops along the way but essentially candidates are moving through a series of diagnostic/summative loops as the organisation attempts to sift talent. This process, while taking on gamified practices, is arguably problematic and is simply playing old games using new media. This is, we would argue, not creating new value. If, however, the possibilities of assessment processes are clearly understood then we begin to see new opportunities to generate better results can be harnessed through gamification.

Candidates in gamified processes (such as those implemented by L’Oreal, Google and others) are not simply sorted in a summative assessment process but are engaged through a more formative series of interactions that generate data to allow:

  1. the skills of the player (applicant) to be assessed
  2. the player to get an idea of the organisation and assess their own fit, and 
  3. feedback to be built in to make the assessment a learning process for both parties.

In this way we see gamification move beyond the hype to adding real value both during and after the assessment process in recruitment.

Ella Hafermalz is a PhD candidate in Business Information Systems at the University of Sydney and is a qualified teacher. Dr Kristine Dery is a Research Scientist with the MIT Sloan School of Management and has expertise in HR and digital technologies.