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Home / Business / Companies / Retail

Liam Dann: Disruption, the new buzzword

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
2 Nov, 2014 04:00 PM4 mins to read

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The speed of technological transformation makes picking trends difficult. Photo / Getty Images

The speed of technological transformation makes picking trends difficult. Photo / Getty Images

Liam Dann
Opinion by Liam Dann
Liam Dann, Business Editor at Large for New Zealand’s Herald, works as a writer, columnist, radio commentator and as a presenter and producer of videos and podcasts.
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Strong leadership needed more than ever to cope with shifting sands of technological transformation.

Disruption used to be something that got you sent to the headmaster's office. Now it is a business buzzword.

Digital disruption was the hot topic at the Institute of Finance Professionals (INFINZ) conference last week, for example.

Bankers and fund managers heard from the likes of high-flying IT executive Geraldine McBride who's message was blunt - transform or die.

Those in the media industry have been confronting these issues for several years, but increasingly every facet of the business world is facing a disruptive challenge thanks to the way technology enables consumers to get what they want more easily - often without needing to deal with traditional retailers. The speed of technological transformation is so fast that it has become almost impossible to predict what the next big trend will be.

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The high-profile success stories are often start-ups and there is an evolutionary brutality to the process. Thousands of small companies start up everyday around the world all anticipating the next big consumer trend - only a handful will get it right and thrive.

This kind of business environment creates a dilemma for bigger corporates. They can play a risky game of trying to pick winners or play it defensively and risk getting left behind.

The goal is to find a sweet spot, balanced precariously on the cusp of social and technological change, keeping your old world customers happy while plugging into a new demographic of web-savvy consumers to ensure your future growth.

It is not easy and requires a culture which is flexible, adaptive and ultimately able to cope with an environment of almost constant change.

Business leaders have to be on their toes because strategy needs to remain fluid only firming up when the direction of the market becomes certain.

There is going to be a competitive advantage for those that can get it right.

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These shifting sands are not limited to the business environment.

Whether macro-economics is driven by technology and the micro-economic change it brings or whether it is coincidental timing as the world evolves from the wreckage of the global financial crisis, we're seeing central banks being forced to set policy against a backdrop of a constantly changing economic landscape.

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New Zealand's Reserve Bank had set policy for a traditional economic cycle where strong growth generates inflation but has been forced to pause and re-assess as inflation has remained benign.

The idea that there might have been a structural economic shift around inflation and the debate it is generating provides another example of a disrupting force pushing us to deal with greater uncertainty.

Of course humans have always dealt with uncertainty and change but there is no doubt the pace of technological change has accelerated things.

That trend itself is not new either. Writer Alvin Toffler described it in his 1970 book Future Shock. He summarised the notion of future shock as: a negative reaction to "too much change in too short a period of time".

You'd think, given the staggering pace of change that has taken place since 1970, that we'd all be immune to it by now.

Perhaps younger generations are more comfortable with it but in the end humans haven't changed their biology. We're probably hardwired to worry about change.

The harsh reality is that some people cope less well with uncertainty. Every employer will have a few workers struggling to cope with the pace of change going on around them.

The trick is to try to create a workplace culture where change is normal but is not disconcerting. We need to create environments that embrace constant transformation while avoiding instability and insecurity.

That's not easy. It requires a culture of engagement and broad enthusiasm for the challenges ahead. It requires the trust of workers who can accept that the job they are doing now won't be the same as the job they are doing in five, or even one year's time.

And it requires strong leadership. Something that successful businesses have probably always needed.

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