The three waves of disruptive trends

It’s critical to maximizing the business value of disruptive trends — such as social, mobile, analytics and cloud — that we understand their adoption lifecycles and leverage them appropriately at each stage.

A particular trend in pioneer or early adopter status needs to be handled quite differently than when it’s progressed into the early majority, or even the late majority. The kinds of benefits you can expect to obtain are quite different as well. Of course, we all know about the window of opportunity for competitive differentiation while the trend is in early stages of enterprise adoption, but let’s explore this topic a bit further to see what other insights might be revealed.

An analogy I like to draw is to surfing.  I believe there’s three waves you can catch around the same trend: the emerging wave, the differentiating wave, and the business value wave as shown below. That is, not only riding the wave around each disruptive trend, but riding the same wave of a particular trend multiple times during its journey to the shoreline. These three waves follow the adoption of the technology as it progresses from pioneers to mainstream adoption.

Understanding the wave that each trend is in at any point in time will help you best exploit its position for business model transformation (emerging wave), high competitive advantage (differentiating wave), or proven business value (business value wave).

Let’s look at each wave and examine some of their characteristics:

The Emerging Wave – The emerging wave relates to disruptive technologies and trends that are in the pioneer and early adopter stages. Trends such as the Internet of Things, software defined networks, wearable devices and augmented reality, and fabric computing are good examples for this wave since they’re in the early stages of enterprise adoption. Because they’re still emerging, there’s tremendous potential for organizations to use them in unique ways to create new business models, deliver new digital products and services, and even explore and instill transformational changes within their industries.

At this stage, business models can be transformational, competitive advantage can be high in the specific areas of implementation, and the long-term ROI of an initiative or venture, if it’s successful, can be outstanding. Outside of the pioneers, however, the business value of the technology itself is often not clearly understood by the masses and there are limited examples of how it can be utilized for others to follow.

The Differentiating Wave – The differentiating wave relates to disruptive technologies and trends that are in the early adopter stages. Trends such as big data and social business are currently in this wave since they’re still in relatively early adoption when you look at how the technologies are being utilized across the typical enterprise. There’s still plenty of time for organizations to achieve competitive advantage and differentiation through these technologies by exploring untapped business scenarios and use cases that others have yet to either discover or exploit.

As an example, in my last blog, we discussed how McKinsey’s value levers for social business illustrate the many options available both within and across organizational functions. Examples include leveraging social to “forecast and monitor” operations and distribution functions, or leveraging social to “co-create products” via open innovation with customers. While several social business value levers such as digital marketing and employee collaboration are in use by many, if not most organizations, there’s still a number of value levers that are relatively untapped. In this wave, there’s also several commonly known ROI examples for fast-followers to pursue.

The Business Value Wave – The business value wave relates to disruptive technologies and trends that are in the early and late majority stages. Trends such as cloud and mobility are clearly in this wave today since the typical business models and scenarios for implementation are well defined, and the typical business value and return on investment is well known and recognized. Examples include use of SaaS for cost reduction and agility, or use of mobile applications for sales force and field force productivity.

That’s not to say that technologies in this wave can’t be used for transformational business models or differentiation, but due to the maturity of the technology and its stage of adoption in the enterprise, this is typically less common or applies to new technical innovations within each mega-trend. The technologies here are generally mature, well understood, and are delivering value on a day-to-day basis. In essence, they’ve become part of the engine room for IT.

Key Takeaways

So what are the key takeaways from this view on the disruptive trends? Think about how you could ride a wave around something like big data, or the Internet of Things, not just for a new business model, such as carving out a role in an industry-specific data value chain (e.g. device manufacturer, data provider, analytics provider, analytics integrator etc.), but how you might ride other waves around this trend as it matures. How could you differentiate your products and services via insights from big data, and how could you realize ongoing business value as it becomes part of business as usual.

One of the answers here lies in collaboration across the C-suite so that the business benefits of disruptive technologies are not only maximized across their lifecycle as they mature and evolve over time,  but also across the enterprise in terms of putting IT to work as an enabler and amplifier of business performance.