Digital Disruption
The Upstream Approach
Digital Disruption: The Upstream Approach
”There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in” - Desmond Tutu
Why You Care - Improve your readiness in navigating the raging waters of digital disruption.
Pulling people out of the river implies that we can see their need for help and so we react by pulling them out. When we are downstream, this need is visible. However, there’s an invisible need that we can’t see. That need centers on the notion of why they’re falling in to begin with. This root need is invisible; do they need swimming lessons, a raft, survival training, etc.
Presumably, the people falling in didn’t believe they have this root need, if they did they would have asked for swimming lessons, a raft, survival training, etc. If we can proactively figure out why they’re falling in, then we won’t have to keep reacting to pull them out. And the people won’t have to go through the pain of being rescued downstream.The root need is invisible and requires us to go upstream to figure it out.
Unarticulated Needs
Now, here’s where things get interesting. Imagine you are in the business of pulling people out of the river. Essentially, you’re fulfilling the visible need. You’re providing value through this service and getting paid for it. Infact, you’re the best at it and the market leader. However at some point, someone else starts serving the invisible needs upstream, they’re providing rafts, swimming lessons, survival training, etc. Over time, the number of people that need your pulling out of the river service starts to decline because they’re getting the invisible need met by the upstream person/company. You try to go upstream but by then it’s too late and you can’t move fast enough to restructure your operations to go upstream. You finally get to the point, where you don’t have any more customers and have to close shop. You’ve been disrupted. Why? Because someone else went upstream to discover the invisible or unmet/unarticulated customer needs.
Unmet and unarticulated customer needs are why organizations keep falling into the digital disruption river, where they are unable to pull themselves out. Why should a business make the effort (by going upstream) to discover these unarticulated customer needs?
Why Go Upstream
First, if we don’t take the time and effort we likely won’t discover it until it’s too late. Very few customers, if any, will just tell us about these needs even when asked specifically. One reason for this is that customers typically can’t articulate them or they may not think it’s possible or practical. For example, If someone had asked me a few years ago if I would get into a stranger’s car instead of a taxi, for the benefit of convenience and lower prices, I would’ve said no - that’s impossible. However, now I Uber/Lyft on a regularly basis. This quote commonly attributed to Henry Ford says it this way, “If I’d ask customers what they wanted, they would’ve told me a faster horses”. Apple’s Steve Jobs put it like this “People don’t know what they want until you show it to them”. For clarity, we’re not advocating for businesses to ignore articulated customer needs or market research. We are saying that there’s a crucially important category of needs that won’t be articulated by customers explicitly. We call these type of needs upstream needs because we have to go upstream both in effort and in time horizon to discover them
Second, these upstream unarticulated needs sometimes have disruptive potential. Netflix discovered an unarticulated need, which was online convenience for home movie rentals. Existing customers didn’t initially ask for online convenience and for a time, a majority still went to Blockbuster to rent movies and pay late fees. However, over time more customers realized the benefits of the online convenience and turned to Netflix. By then, it was too late for Blockbuster. Today, Blockbuster is out of business because of disruptive forces that converged in service of the unarticulated needs discovered by Netflix. We recognize that not every unarticulated need has disruptive potential. Certainly, not every unmet need produces a Netflix. However, we believe it’s highly beneficial to at least seek to discover these unarticulated as opposed to being blind to them altogether.
Unseen Disruptive Forces
So why are most organizations drowning in the digital disruption river? Because they can’t see the disruptive forces at play upstream until it’s too late to swim effectively. For example, Kodak like Blockbuster was unable to see the disruptive forces early. Please note that looking at or being aware of a digital innovation is very different from seeing its associated disruptive forces at play. Kodak’s leadership looked at the digital camera but didn’t see the disruptive forces at play until it was too late for them. Put another way, looking may be involuntary, seeing the unseen is not.
Further more, digital companies are not immune to digital disruption - think Blackberry (RIM). Some companies think that by digitizing their business operations, they’re automatically immuned to digital disruption. Some even use the term “Digital Transformation” to refer to their digitizing efforts. Digitizing your operations does not keep you safe from digital disruption. Remember our analogy of the business that pulls people out of the river downstream. You can use digital robots to pull people out (i.e digitize your business operations) but if there’s no one downstream that needs pulling out, then your digital robots will stay idle. Digitizing your operations does not automatically grant you immunity. Digital technology plays a crucial role in digital disruption but not inherently because of the technology but rather because of the benefits it offers and how it changes the customer’s behavior. Digital rafts may be disruptive to the downstream business but it's not necessarily because the rafts are digital but because the rafts themselves, protect the people from falling in the river.
For both digital and non-digital organizations, we believe the core issue is the same. We fail to see the disruptive forces at play early enough. The Upstream approach (popularized by best selling author Dan Heath), seeks to help us see what may be hiding in the wings (at the edges) and enhances our visibility of disruptive forces. It helps improve our visibility of what’s happening upstream. This visibility helps us effectively navigate opportunities before they make their way downstream and become disruptive problems. The paragraphs that follow explain how to begin the process of going upstream.
So What, Now What
So What: Author John Maxwell says “Anything worthwhile in life is uphill, all the way”. We would revise this a little by saying “For those who desire positive growth and change, everything is uphill, all the way”. In the context of the upstream approach to digital disruption, we would say it like this - “Anything worthwhile in life is upstream, all the way”. However, very few people want to go upstream. Everyone wants to walk on water but few want to step out of the boat. Everyone wants to go to Heaven but few want to die, and/or die to self. Everyone wants to get and stay in shape but few want to eat their veggies and workout everyday. Everyone want’s to be a leader but few people want to actually lead by doing the work. If you got to this section of the blog, you are not everyone; you are part of the few willing to do the work leadership requires. Going upstream requires work and within an organization this work begins with the leader/leadership, no one else.
A quick side bar on digital transformation. Most organizational leaders see digital transformation as a common response/solution to digital disruption. They therefore believe that such efforts in digital transformation should be driven by Digital/IT leaders or other officers of the organization and not the CEO. We believe that for sustained digital transformation to occur, it must be demonstrated and lived out by the CEO. Further more, as we’ve discussed thus far, the upstream approach is a different way of thinking about digital disruption. It is a transformation in mindset first and then other elements follow. End of side bar.
Now What: Now what do we do about digital disruption. We can keep doing what we’ve been doing downstream. We can keep focusing solely on the visible downstream problems and requests or we can add the invisible upstream needs and opportunities to our intentional focus. It shouldn’t be surprising that if we keep doing what we’ve been doing, we will get the same results. If we want a chance at a different outcome, we should try something different. Further more, anything worthwhile takes time and the upstream approach to digital disruption is no different. It’s a journey and a life-long practice. To help you in your upstream journey and mindset shift, we’ve included three work action levers for you to consider:
Eliminate Problem Blindness: How do you ensure you don’t find yourself in a place where you’re forced to respond to digital disruption? You seek to eliminate problem blindness, that’s how. Problem blindness occurs when you’re unable to see the root problem or you see it when it’s too late. To do that you have to redefine the problem as understanding the disruptive forces associated with unarticulated customer needs. The problem is not digitizing operations or fending off digital disruption. The real problem is ensuring we don’t find ourselves in a place where we’re forced to respond to digital disruption. Consistency is key and scheduling time for this is crucial given the busy schedules of most leaders. How? Live with customers, learn about emerging digital innovations and disruptive forces. Key questions to help you get started include:
Do you have a regular process for learning about the business implications of digital innovations? Try to focus on broader business implications and not just benefits. For example, in the case of 5G innovation, look beyond the visible benefits of higher speed, etc to the second and third order consequences such as autonomous-vehicle digital ads.
Do you engage in a regular practice of discovering unarticulated customer needs? Focus on behavior and not verbal requests or comments.
Do you have the right talent and leadership for these two efforts within your organization?
Grow Your Vision: Growing the vision means expanding an organization’s current vision based on new and existing capabilities. Compare Apple to Compaq computer. This is not the same as growing the business. Growing the vision focuses on the TAP (Total Addressable Problem) while growing the business focuses on the TAM (Total Addressable Market).
“To make a contribution to the world by making tools for the mind that advance humankind.”.
Think in terms of TAP and not TAM; non-consumers, not just existing customers. etc.
Advance Towards Your Vision:
Advance Your Cause .
Sacrifice Success