You may be thinking that the title of this post or blog contains a misspelled word, but you’d be wrong. I actually created this word to represent what I see happening in the digital world today. There’s a lot of content about digital disruption out there, but the word “disruption” just doesn’t articulate the phenomena we experience everyday. In Texas, we’d say it just doesn’t cut the mustard!
The word “disruption” is defined as “Disturbance that interrupts an event, activity, or process.” This implies that the event, activity or process will continue after the interruption or disturbance passes.
However, that is simply not true. Digital Technology and disruptive innovation is changing the world, permanently. Things will never be the same.
Furthermore, the term “digital disruption,” doesn’t capture the magnitude of these fundamental changes. Any MBA graduate can tell you about the “Value Disciplines Model.” It’s a concept described in the book “The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market” by Michael Treacy and Fred Wiersema. In the book, Treacy and Wiersma introduced the three following values:
- Operating Excellence: characterized by low or lowest price and hassle free service, like Walmart.
- Product Leadership: characterized by products that are the best in their market and highly valued by customers, like Apple.
- Customer Intimacy: characterized by occupying only one (or a few) high-value customer niches and being obsessive about understanding the individual customers in detail, like Amazon.
Treacy and Wiersma found that, in order for companies to be successful; they had to have a minimum competence in all of three values above, but had to be the best or the market leader in only one! They represent the idea with the following diagram:
Treacy and Wiersma asserted that enterprises that sought to be the best at more than one of these values actually reduce their competitiveness which would result in loss of market share and profit. The reason for this is because the basic enterprise culture, structures, people, facilities, processes and business models that lead to excellence in any one discipline are incompatible with achieving excellence in the others.
For example, Operationally Excellent enterprises tend to have a limited range of products and configurations as this is cheaper to build and deliver than a vast range of products and configurations typical of a Customer Intimate enterprise. Tracey and Wiersema thus proposed that Enterprises must make a key strategic choice about which value discipline to select.
And if you were to believe Treacy and Wiersema a few years ago, then you’d be correct. Now, you’d be wrong! And in the future, Every company must be the best or the market leader in all three disciplines or they will dysrupted permanently!
Notice that I used the word “Dysrupted,” I coined this term to expand the definition of disruption to reflect the fundamental and permanent change to the status quo which we know today. The word “Dysfunctional,” defined as “Not operating normally or properly,” provides the missing element when combined with the word “Disruption” to make the point that the affected event, activity or process will never again function normally. Taken together, the term “Dysruption” means a “Disturbance that fundamentally interrupts an even, activity, or process to such a degree that it will never operate normally (in the same way) again.”