Disruptive change is affecting managers, workers, and organizations, as technology and globalization "unbundle" entire industries. Learn why this is happening—and how you can anticipate the changes that can happen to you.
- So we all know the world of work is changing rapidly, but does everyone really know why? Many of us has a suspicion it has something to do with technology. Well turns it, it's actually the combination of automation and globalization that's mostly fueling so many of the seismic changes we see in the world of work. By using technology to enhance a range of tasks that people preform in their work and allow those tasks to be distributed around the globe, the pace of change in the world of work is rapidly accelerating.
Now you've probably heard of Moore's law, that's the famous observation by Intel's co-founder, Gordon Moore, where the performance of micro-processors, the brains of computers, doubles every year, year and a half, while the price drops by the same amount. Turns out a well known author and inventor, Ray Kurzweil, took that observation a step further. Now Ray realized that pace of change in a wide range of technologies that increase in performance and the drop in price actually grows exponentially, like a hockey stick.
And just like the curve of a hockey stick, it doesn't seem like change is happening that fast. But then it starts to accelerate and the exponential growth curve shoots off into the future. This exponential curve began when modern computer technology became unbundled, a concept developed by John Hagel of Deloitte's Center for the Edge. So let me give you an example: the original IBM mainframe was a bundle of technologies, computing hardware, a micro-processor, an operating system and software applications.
But then, IBM developed the PC, which allowed each of these components to become unbundled so each could be easily replaced. Think of it this way: the mainframe was a vertical bundle of components, but the PC turned those components on their side and unbundled the various layers horizontally. So I worked at a PC manufacturer early in the mid 1980s, and for a while there was a tremendous amount of opportunity in that field, because computer technology has so recently become unbundled.
Think of all the game changing technologies that have become popular in the last 30 years: the PC, the internet, the smart phone. Each of these hasn't just redefined how we use information and how we communicated with each other, they've dramatically increased the pace of change in our work and in our lives. If you want to get a taste of their impact, try going an afternoon a week without your smart phone or your PC. If you're going out for a walk or a bike ride, leave all your technology behind. So if you don't notice the pace of your life slowing down even just a little bit.
That rapid pace of technology change comes from unbundling. It turns out this process of unbundling means that innovation can happen independently at each of the various layers. In the past, distributive change often had to happen serially, it depended on a sequence of innovations. It took almost 500 years between the invention of the printing press and the invention of the personal computer. But information technology allows information to occur in parallel, dramatically increasing the pace of change.
In fact, unbundling doesn't just work with technology, entire industries have become unbundled in a very similar way. Take, for example, the media industry. I was once the editorial director for a half dozen technology publications. Back in 1994, I helped to start Interactive Week, which we called the internet's newspaper. It turned out, we were not only documenting the rise of the first global communications network, we were also documenting the unbundling of the publishing business.
So what's a newspaper? Think of it as a series of vertical layers. A newspaper business has a physical plant, a place to smear ink on dead trees, as one pundit calls it. A newspaper business also the ability to create content, writers and reporters. It can also curate content, processing the content, using its editors and it can distribute that content, delivering or mailing it and it can sell ads. Now along comes the internet and quite literally, the media industry was blown to bits.
You don't need a physical plant anymore. How about content creation? That's done by millions of bloggers. Content curation, editing and filtering articles? That's done by sites like Reddit and Huffington Post. Distribution? The internet is a global distribution media. You don't need to ship a website. And finally, ads. Well that went to Google and on mobile, much of it went to Facebook. Now you can see why unbundling is so pervasive. It reshapes entire industries, allowing for a completely new entrance to create new value and to gain new market power.
Well that's why I'd never start a print magazine business again because it's a field that's become completely unbundled. In fact, we've seen this happen over and over again in a range of different industries. Sure technology has changed businesses before. There aren't really bugging manufacturers anymore. But what's different about information technology is that it allows companies to innovate, independently and rapidly at each layer, and then have instant access to markets around the globe. Independent innovation is what allows changes to happen so quickly and dramatically, and that's in large part why the pace of change is so rapid and why the pace isn't going to slow down anytime soon.
Now you can apply this thinking to your current industry. Take out a piece of paper and list the major elements of your industry vertically. Five or six is plenty. Which organizations are the biggest players now? Or if you think your industry has already become unbundled, who were the major players? Write those down too. Now do another version of the same layers horizontally. Think of what that field could be like once it's become unbundled. What are the existing organizations that could be successful in this new model and what new players could arise to take control over each of the horizontal layers? Don't look at this as just a thought experiment, unbundling is real and if it hasn't happened already to your industry, it could be happening just around the corner.
- Dealing with disruptive change and the new rules of work
- Establishing a new contract with workers
- Rethinking job qualifications
- Hiring for diversity and inclusion
- Identifying key skills for adaptive workers
- Helping your team become lifelong learners
- Leveraging automation for your team
- Becoming an adaptive manager
- Making human resources a partner
- Recognizing when your adaptive strategy is working