04 Dec Embracing the Age of Disruption
Creating the Environment for Disruptive Success
Disruption. This single word is simultaneously the most overused and potentially the most provocative word in the modern tech era.
It connotes substantial, irreversible change. For companies that have long done business in the same way year after year, disruption is the siren call of an impending Darwinian moment. As Altimeter Group’s Brian Solis says, “Disruption either happens to you or because of you.”
Almost twenty years ago, Clay Christensen penned his seminal work on innovation in his first book, The Innovator’s Dilemma. He was the first to coin the phrase Disruptive Innovation, and used it to describe a phenomenon in which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.
The disruption theme was a major focus for us over the past two months. We highlighted the disruption that’s already happening right here in BC and its potential impact on key industries. Our Fintech event showcased dozens of companies that are seeking to disrupt the financial services and banking industry. These companies are seeking to re-imagine the consumer and business banking experience, bringing the power of new technologies, new business models and customer-centric design that is poised to challenge the trillion dollar banking establishment.
In November, we partnered with Microsoft to illustrate the disruption that’s happening in computing and in particular, the Cloud. Featuring some of the fastest growing cloud-based companies (MediaValet, Mojio, Thinkific and PHEMI), the discussion centered around the computing power that has re-invented the software paradigm, providing boundless opportunities for aggregating capabilities and is launching a wave of new capabilities for machine learning and automation. This poses both disruptive risk and opportunity for virtually every industry.
Disruption has created a new class of corporate giants. Since 2003, a new company has reached a $1 billion valuation every three months in the United States. That rate of growth is astounding and accelerating. It took several decades for MDA to become a billion dollar company; Avigilon took ten years; Hootsuite took seven years and Slack? It took just one year.
Disruption has also accelerated the demise of many companies. The average lifespan of an S&P 500 company has dropped from 56 years in 1960 to just 15 years in 2014. As Deloitte suggests in their report, nearly half of today’s Fortune 500 companies may not exist in ten years.
Here in Canada, the issue is particularly acute. Deloitte boldly declared in their recent report that “Disruption is coming – and Canadian firms are not prepared”. The Conference Board of Canada’s report scored Canada with a “C” grade, ranking only 9th among 16 peer countries. Factors like organizational friction, culture and values stand as the top reasons why the disruption challenges for corporate innovation are often self-induced and are hard to overcome in their existing internal environment. This results in:
Unlike startups who are are innovative by design, corporations are innovative by exception.
As our partners at MaRS and Communitech have revealed, the key to supporting corporate innovation lies in creating a suitable environment.
“Partnerships and innovation are the key to building the bank of the future, which is why we are excited about the opportunity to further our commitment to innovation with MaRS…The opportunity to have our team work alongside top design talent and entrepreneurs in a collaborative environment will further our leadership in developing the innovations that will change the way Canadians bank.”Aayaz Pira, Vice President, Digital Channels, CIBC
For corporations in BC, the BCTIA Innovation Hub provides exactly the kind of environment for success, with 25 resident growth-stage companies pursuing innovations that are powered by the energy, passion and drive of startup entrepreneurs.
Combining the two in the same environment can lead to all sorts of new opportunities. For startups, it creates an opportunity to connect with corporations as potential customers or channel partners. For corporations, it provides an immersive environment where they learn the startup techniques that drive faster development cycles and gain a glimpse into potential partnerships that can improve their dexterity.
Early next year, we’ll be building a corporate residency program to test that thesis. It will combine a handful of corporate innovators with the growth-stage companies at the Hub. If we’re successful, we’ll see a whole new breed of startup and corporate collaborations in BC.
If you’re ready to disrupt your company, architect an innovation culture, and reinforce yourself as an industry leader, then come talk to us. We may have exactly the environment you need.
President & CEO
In the News:
BCTIA Expert Network: http://www.bctia.org/Blog/2015/12/3/BCTIA-Expert-Network Sauder’s MBA Showcase Recap: http://www.bctia.org/Blog/2015/12/2/MBA-Showcase-Recap
Metro Vancouver’s ‘Fin Tech’ Sector Takes on the Banking World – http://www.bctia.org/Resources/News/BCTIA-News/2015/11/23/Metro-Vancouvers-Fintech-Sector-Takes-on-the-Banking-World
BCTIA Members Elect Board of Directors for 2015-2016 – http://www.bctia.org/Resources/News/BCTIA-News/2015/10/28/BCTIA-Members-Elect-Board-of-Directors
BCTIA Collaborates with PayPal Canada to Launch Vancouver FinTech Cluster: http://www.bctia.org/Resources/News/BCTIA-News/2015/10/23/BCTIA-PayPal-Canada