It is possible for a new, fascinating image to be created, despite the disintegration of traditional, familiar structures.

«Nobody should think they won’t be affected»

It is imperative that every company monitors and tracks technological developments on an ongoing basis, says Professor Georges Grivas, Director of Studies and lecturer at the University of Lucerne. He explains who is put at risk by disruptive development – and what this term actually means.

THE PHILANTHROPIST: What makes digi­ta­li­sa­tion diffe­rent from other econo­mic, social, and, above all, indu­strial changes?

GEORGES GRIVAS: Digi­ta­li­sa­tion affects every kind of deve­lo­p­ment, whether econo­mic, social or indu­strial. It is a compre­hen­sive shift, and very few deve­lo­p­ments across humanity’s history can be compa­red to it. 

What does this mean for compa­nies, their mana­gers and their corpo­rate culture?

Digi­tal trans­for­ma­tion affects every single area within a company. A company’s manage­ment needs to under­stand the tech­no­logy that under­pins it, while guiding the trans­for­ma­tion from above – and wanting it to happen, too. Corpo­rate culture will not escape digi­tal trans­for­ma­tion unsca­thed, either: it will undergo marked chan­ges. It is not unusual for central elements, such as the busi­ness model – or, in other words, how a company earns money – to change. In turn, this often requi­res a new corpo­rate culture.

Disrup­tive chan­ges are parti­cu­larly chal­len­ging. What exactly are ‘disrup­tive changes’?

The word ‘disrup­tive’ refers to new tech­no­lo­gi­cal inno­va­tions repla­cing existing busi­ness models, or comple­tely squee­zing them out of the market.

Can you give an example of this?

Stan­dard mobile phones were almost comple­tely super­se­ded by Apple and Android smart­pho­nes, while CDs and DVDs were prac­ti­cally supplan­ted by strea­ming provi­ders like Spotify and Netflix.

Disrup­tive deve­lo­p­ments pose a threat to compa­nies’ busi­ness models and their very existence as a result: how can compa­nies react to this?

It is important that compa­nies moni­tor emer­ging tech­no­lo­gies and their impli­ca­ti­ons on an ongo­ing basis. Nobody should think that they won’t be affec­ted by them, or that their market isn’t going to be impac­ted by disrup­tion. Netflix is an easy example of this. The company laun­ched in 1997, opera­ting as an online video library sending DVDs and Blu-rays by post. It reco­gnised the oppor­tu­nities offe­red by strea­ming early on in the game, setting up its video-on-demand busi­ness as far back as 2007.

How can a small company ensure they don’t miss any deve­lo­p­ments and fully tap into the oppor­tu­nities on offer?

In my view, it’s the role of the admi­ni­stra­tive board and manage­ment to pursue a forward-looking, stra­te­gic approach in the inte­rests of their company. This means that they need to reco­gnise deve­lo­p­ments, such as tech­no­lo­gi­cal inno­va­tions, early on in the game. As a result, it is essen­tial that the members of the admi­ni­stra­tive board and manage­ment alike are able to pick up these risks and oppor­tu­nities on their radar.

Can an SME outside the tech­no­logy sector even hope to deli­ver digi­tal innovation?

SMEs (espe­cially those not in the tech­no­logy sector) don’t need to deli­ver digi­tal inno­va­tion. Howe­ver, they need to make sure they have the right tools at their dispo­sal to success­fully over­come the struc­tu­ral change wrought by digitalisation.

Does disrup­tive deve­lo­p­ment occur within a parti­cu­lar sector, or can it also make an entire sector superfluous?

Both are possi­ble, there’s no doubt about that. For example, tech giants like Face­book, Google, Amazon and Apple are putting out feelers in the finan­cial sector and expan­ding what they offer in this domain. It is a logi­cal conse­quence that even the finan­cial sector will be incre­a­singly driven by tech­no­logy. As ‘digi­tal nati­ves’, IT compa­nies have a natu­ral advan­tage here. Their global reach, on a digi­tal level, is unpar­al­leled, and their marke­ting machinery is excellent.

Will this change social structures?

Abso­lutely. One up-to-the-minute example comes in the form of block­chain tech­no­logy, which makes it possi­ble to ‘bank the unban­ked’, meaning that people around the globe who previously didn’t have a bank account or access to finan­cial services are now being connec­ted to the finan­cial system, which will change the struc­ture of society at every level.

Can you see any hints of disrup­tive deve­lo­p­ment in the phil­an­thro­pic sector or in terms of donations?

Even these areas will feel the effects of digi­ta­li­sa­tion. For example, we can see deve­lo­p­ments regar­ding topics such as trans­pa­rency, where tech­no­lo­gies like block­chain are having a posi­tive impact. As every tran­sac­tion is perma­nently stored in the block­chain, these tran­sac­tions can be tracked at any time, which makes it possi­ble to trace dona­ti­ons and finan­cial flows trans­par­ently. In turn, this enab­les a charity to cut out the midd­le­man, ther­eby redu­cing costs. 

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