​The ripping point part 1: Where entire industries meet their digital demise

Digital disruption is a 'ripping point', a class 6 rapid just around the corner with extremes of difficulty, unpredictability and danger

Malcolm Gladwell’s book, “The Tipping Point: How Little Things Can Make a Big Difference”, published in 2000, has served us well as a descriptor of how sociological changes occur, and can be manipulated, to sell concepts and products.

The rise of the internet and later digital technologies has greatly enhanced our ability to cause, as Gladwell describes, “ideas and products and messages and behaviours [to] spread like viruses” for commercial or other gains.

Many businesses have since disappeared because of digital and other technologies used to create tipping points and it could be seen to be safe to assume that this trend will continue unabated.

Savvy businesses look to create and leverage their own tipping points, and strive to avoid disadvantageous tipping points that can damage their own business.

This is the first in a series of articles that will examine why true digital disruption is no longer just a ‘tipping point’ that might be seen in the distance on the river and can be safely negotiated with a few casual strokes of an oar.

Rather it is a ‘ripping point’, a ‘class 6 rapid’ just around the corner with extremes of difficulty, unpredictability and danger. Just as tipping points are centred on sociological changes our proposed ripping points are centred on technological convergence.

Furthermore, we believe that entire classes of industry are at risk from these ripping points, not just the less prepared businesses within those industries.

Our dystopian stance is deliberate.

A “customer-centric” strategy is the first indicator of an industry or organisation facing a ripping point horizon. It’s a simplistic and silly strategy in the digital age – a misguided view giving the impression that the organisation actually has control of whatever it means by “customer-centric”.

The power is with the customer – it never was with the organisation. Customer-centric is irrelevant if customers don’t trust you, and question the value that is delivered.

Trust in institutions – big banks, retail, professional services organisations, membership bodies, governments and so on – has been severely eroded by repeated failures, rigidity and complexity in the eyes of the customer.

“Customers” have gone back to the old ways – trusting their neighbours and friends for information and recommendations, good and services. The only difference is that digital drastically extends the size of your neighbourhood.

The simplistic notion of “customer-centric” fails to comprehend the convergence of organic ripping point forces and their influence on the entire customer experience.

The ripping points are being accelerated by the inescapable convergence of the increasing availability and reducing costs of enabling technologies. These include big data, cloud, the Internet of Things, in-memory computing, cognitive intelligence, avatars and complex position determination (for example, determining the position of the human body across its range of motion in real time).

In this era of convergence, the ripping point forces shape and creates entire ecosystems and cause industries to meet their digital demise.

After all, industries are a construct of the “industrial era”, where control mattered. Control was the strategy.

Vertically integrated. Customer-centric. We own the customer. We measure the customer. In our channels. Locked-in. For life. Oh dear.

What has to change most is the thinking. The Boston Consulting Group recently tweeted that “digital is all about speed” and “are you in control of your #digital journey?”

The digital ecosystems are not about control or speed.

Rather, we see the pre-eminence of the empowered customer, the influence of community, the contextual experience, content that is both created and consumed, seamless connection, value created through commerce, and confidence in interactions that deepens through cognitive insight.

Articles to follow in this series will look at various industries – professional services; big box; customer contact; membership aggregation; and public sector – and what lies beyond their ripping point.

Marie Johnson is chair of the Digital Careers National Steering Committee, and is a Board Director of the Australian Information Industry Association. She is also managing director and chief digital officer at the Centre for Digital Business.