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Productivity and Profitability: How Disruption Creates Opportunity in Professional Services

The theorised phenomenon of disruption is defined as a process whereby a product, a service or a solution disrupts the rules of an already established market.

If we look at history, disruption is not a new phenomenon. Repeating patterns of massive disruption have occurred regularly.  Today's digital revolution is not unlike major phases of disruptions of the past, such as the agricultural revolution and the development of canals and railways. Technological progress, along with the globalisation of trade and demographic changes, help to spread these revolutions to every sector of the economy.

In fact, the Austrian economist Joseph Schumpeter identified the theory of creative destruction back in 1942. He describes the deliberate dismantling of long-standing practices in order to make way for innovation and improved methods of production. He observed Henry Ford’s assembly line as a real-life example of creative destruction, fluctuating dynamics constantly reshaped or replaced by increasing innovation and competitive circumnavigation.

History also shows us that when a transformational technology appears it is accompanied by an incredible upsurge of associated energy. It is this energy that creates a Tsunami effect, stimulating change, driven by “out of the box” thinking and unblinkered vision.

This energy is now driving the re-thinking of Professional Services organisations key values - clients, competition, data, and, with it, innovative remodelling of vision.

Clients: Thinking has to be laser-focused, treating them as key influencers, creating an omni-channel experience reflecting their changing demands.

Competition: Traditionally mirrors of our own organisations, but no more. Think of Tesla. Initially energy, then vehicle manufacturer and now space travel vision. Even frenemies, you live with them but cannot do without them either, as they form a critical part of your business partnership.

Data: An organisation without full control or ownership of all its metadata, devalues one of its key strategic assets. The inability to fully unlock or create a complete 360 depiction of customer insight and strategic value.

Continuous evolvement of value proposition is critical to every business. Defence of business with barriers to entry, is now perceived as almost futile. The key is to communicate with customers, learn what their vision and associated demands will be, supporting alignment of new  propositions to be that trusted advisor/partner for tomorrow.  Allowing creation of experiences that stimulate customer demand, whilst energising your whole organisation to share in this newfound stimulus.

If businesses are able to engage this energy and refocus on genuinely better ways of organising and deploying responsive business processes, disruptive energy can be used as a catalyst for success.

Three focus points for energy resurgence

1. People

Energise and evolve teams with the right skill sets and establish a culture of empowerment to embrace disruptive change and use it as a springboard for success.

2. Process

Review your business process responsiveness and efficiency. Focus on shared corporate intelligence, introduce smart approval pathways and information flows to increase, communications, compliance and governance.

3. Technology

Enable people and processes to work seamlessly as a single core, establishing an infrastructure that removes wasted time, maximises resources and allows people to work effectively.

In summary:

People always tend to think that a tough economic situation is the sign of a “new normal” and, conversely, that a robust world economy will last forever. But as history has shown, economic conditions always alternate and technological revolutions (disruptions) are part of our business fabric.

At the heart of this trend, is the fact that today’s disruptors will surely become tomorrows disrupted. The process inevitably results in losers and winners. Entrepreneurs and workers in new technologies will inevitably create disequilibrium and highlight new profit opportunities. Producers and workers committed to older technology will be left stranded.

The process is nevertheless irreversible: disruption happens embrace and deal with it.