David Craig, President of Financial & Risk Business at Thomson Reuters, agrees. “Disruption is a word that’s bandied around a lot because we all want to stay on our toes.” Disruption is nothing new, he points out – his company, established in 1850, distributed financial news via carrier pigeons before that model was disrupted by the arrival of morse code.
Now, he says, “The confluence of new technologies and consumer expectations, along with the pressure on cost and performance, is creating a perfect storm. That’s what makes this an exciting but nervous time for business leaders.”
Talking about how his own firm has innovated, he says, “We’ve encouraged our middle managers to experiment, try something out and show us. Come forward with something tangible that you can demonstrate. There’s a lot of talk going on about disruption – let’s turn it into action, let’s see it.”
Professor Markides points to evidence showing that when companies see disruption as a threat to their core business, they tend to adopt short-term oriented defensive strategies that end in failure. If they approach disruption as an opportunity, they don’t have enough sense of urgency to pursue it. “To respond to disruption successfully you need two strategies: defend your core business and attack the new opportunity,” he says.
Craig’s advice for big organisations wishing to respond to disruption is to look ahead at what’s coming in your industry and make sure your feelers are far enough out. “In 2015 we discovered we had more customers who were machines rather than humans. Machines and humans need to augment each other.” Thomson Reuters reacted by joining together two business units and creating a platform for innovation. It now has 8,000 partners, with 150 developers joining it every week.
“There are a lot of challenges out there,” he says. “Let’s find the technology to solve them.”
This podcast is part of the Digital Disruption Briefings, hosted by Julian Birkinshaw, Academic Director of the Institute of Innovation and Entrepreneurship.
Next podcast: Professor Julian Birkinshaw interviews Professor Gary Hamel on how large corporations are responding to the digital revolution