The landscape of industrial tech often seems to be in a state of constant upheaval, fluctuating constantly. New concepts, machines, and apps are introduced seemingly every day. Disruption has always played a key role in how the industrial economy evolves, and digital technology, in particular, has created one of the biggest upsets in recent years.
According to business leaders Steven Kotler and Peter H. Diamandis, co-authors of the 2015 book Bold: How to Go Big, Create Wealth and Impact the World, the introduction of new exponential technologies into social and business spheres tends to follow a discernible pattern. And this pattern, Diamandis says, acts as “a road map of rapid development that always leads to enormous upheaval and opportunity.”
This road map comprises the 6 Ds of digital disruption: digitization, deception, disruption, demonetization, dematerialization, and democratization.
Although the opportunities are there for the taking, it can be daunting to branch out into uncharted territories. Just keeping pace with constantly evolving technology can be overwhelming. This is where the 6 Ds can help you in charting your business trajectory and creating a solid plan for the future.
The 6 Ds of Digital Disruption
1. Digitization
This is the phase in which information is reproduced and shared via some kind of digital platform. The data is first converted from its original corporeal state into the lightweight binary language of ones and zeroes. By shedding its material form and existing on a digital plane, information becomes easier to share and replicate.
The internet itself serves as a good example of how digitization works. Before the internet, knowledge and learning were largely confined to books, and therefore people were limited by both the scope of books and their availability. The internet changed all of this, making information digital. With the physical limitations removed, people were suddenly given easy, quick access to an unending stream of information on any subject imaginable.
2. Deception
This is the phase in which a new technology takes some time to grow; at this stage, new tech may not seem very impressive or useful. According to Kotler, this happens when a new tech trend experiences a lot of “hype in the beginning” but fails to pick up much traction. This slow start is often only an illusion — once the seed is planted, small increments of growth begin to add up over time.
For example, when commercial e-readers first became available in the late 1990s, they failed to garner much consumer attention. Over the next few years, a few more e-readers would come out, but still none really gained traction in the marketplace. To the casual observer, it seemed as though the e-reader trend was destined to be over before it even began. But then, in 2007, Amazon released the Kindle, along with an online store packed with thousands of e-books. Almost overnight, something that was once a niche interest with a few enthusiasts exploded into a global phenomenon.
3. Disruption
This is the phase in which established habits and practices are transformed by a new technology entering the social or business stratosphere; as people start using a technology more and more, they realize that it has the power to improve their lives or optimize their jobs. Suddenly, the traditional systems and practices become obsolete and irrelevant.
For instance, humans once communicated long-distance by sending handwritten letters via carrier pigeons. This method worked fairly well during a time when there was no such thing as high-speed communication. However, at some point, the postal system was disrupted by inventions like the automobile and the telephone, which completely changed the way mail could be delivered — as well as how people communicated in general. Eventually, the advent of email and social media changed things even more, with each technological innovation rendering its predecessor obsolete or outmoded.
4. Demonetization
This is the phase in which something is reduced in cost through the use of digital technology. Put simply, this occurs because the digital version of an item costs less to produce, and also because the devices people use to access digital information become increasingly prevalent and affordable.
In a business context, demonetization often comes in the form of as-a-service companies, such as infrastructure-as-a-service (IaaS). By utilizing IaaS, companies can reap the benefits of having a server without actually investing a huge amount of money to build and power one. The as-a-service model is growing in popularity specifically because it offers companies an economical way to support their business using services and resources.
5. Dematerialization
This is the phase in which physical technologies are transformed into immaterial mediums. This is the fuel that powers digitization, creating compact, lightweight tech capable of holding an enormous amount of information while offering enhanced functionality. Once a technology enters into the dematerialization phase, it becomes accessible and actionable in a way that the material version could never.
The average smartphone, for example, acts as multiple devices in one. A smartphone serves as a high-definition camera, telephone, computer, GPS, and so much more — all contained within one small, lightweight device.
6. Democratization
Once something becomes digital and eventually demonetized, it essentially becomes available for use by anyone. This is the phase in which the small business Davids can go toe-to-toe with the corporate Goliaths in the marketplace. Because digital technologies are accessible and economical, companies no longer need a vast reservoir of resources in order to provide products and services. The playing field is leveled, and the marketplace becomes much more democratic.
Leveraging the 6 Ds of Digital Disruption for Your Company
The first step is to understand where your company stands in terms of digital technology. Chances are your business is already taking advantage of disruptive technology in some capacity. Once you have a clear picture of where you are, you can start the process of identifying areas for improvement.
Think about the various operations that could benefit from new technologies. Ask yourself what aspects of your supply chain, logistics, or even manufacturing operations could use a digital upgrade. Use the 6 Ds as a framework to understand both your current state and your desired trajectory.
Go over your financial reports with a fine-tooth comb, and pinpoint areas that you’d like to improve. Do the same thing with your production reports, your invoices — any documentation produced by your company. Use this analysis to develop realistic digital company objectives, prioritize your goals, and create a plan of attack. This plan needs to be multilayered, taking into account a pragmatic timeline for technological integration, as well as a realistic scaling implementation.
Once you have these details figured out, you can start researching your options. During this phase, think about them in terms of the 6 Ds, asking questions like:
- Is there a digital version of this process that we’re not using?
- Have we been ignoring specific technologies that don’t seem immediately useful?
- Are our processes as up-to-date as they could be?
- How can we upgrade our technology and still save money?
- Would we benefit from downsizing on some of our physical systems?
- How will we leverage disruptive technologies to create a competitive edge in the marketplace?
Thanks to Industry 4.0, industrial companies are spoiled for choice, with tons of advanced digital technologies available. From the IoT to blockchain to cloud computing and beyond, there are countless ways these technologies can be used in the factory, office, or supply chain.
Lastly, the plan also needs to be adaptable so that it can accommodate the emergence of future technological disruptions. As dynamic and robust as our current technology is, it’s destined to become obsolete one day. At the current rate of exponential growth, that obsolescence may happen sooner rather than later. But by using the 6 Ds to better understand the various stages of technological disruption, you can give yourself some wiggle room.
Evolution Through Disruptive Innovation
While these rapid changes may seem daunting, technological disruption is necessary for economic evolution, creating the potential for new, healthier growth on both a micro and a macro scale. By fully understanding the 6 Ds of digital disruption, you can harness its power, using it to bring about more efficient, effective operations while boosting the bottom line.