Disruptive Technology: Opportunities, Threats or Distractions?

Resource

Disruption from within your organization is better than disruption from external forces.

By Ken Colburn

It’s obvious that we’re living in an age of change and revolution at a speed that is unparalleled. Technology is certainly a major player in this game and each of us has had to deal with the disruptive nature of this rapid change.

The Basic Conflict

The franchise industry is all about consistency, uniformity and strategic change; if you think about it, it’s actually in direct conflict with the dynamic nature of the technology world. As both a career technologist and a franchisor, these divergent worlds are obvious to me almost daily. The technology world is about constant reinvention, alternative perspectives, rapid change and leveraging first-mover advantage whenever possible. “Move fast and break things” was a huge banner that I saw on my first visit to Facebook headquarters years ago. The mindset is, if things are kind of working, there is no rush to make any changes, but when something breaks, it forces you to focus on a fix that generally results in improvements. This also creates an environment where failure is not considered a bad thing but a learning experience. The “fail fast” motto is legendary in the start-up world, but none of this resonates with the world of franchising. The chaos created by constant change isn’t something that works well in the franchise model, but ignoring what’s going on all around us is a sure way to suffer collateral damage. Whether we like it or not, we must foster a culture that embraces change to some degree or risk becoming irrelevant faster than at any time in history.

Historical Perspective

This isn’t the first wave of disruption and innovation from technology that the franchise industry has experienced. The disruption caused by the Internet changed the franchise experience forever. I asked a couple of industry veterans to give me some historical perspective as a potential way to learn from the past. Both Joe Bourdow, CFE, retired president of Valpak and former IFA board member; and Dan Martin, CFE, president and CEO of IFX Franchise Management Systems, were actively involved in franchising when the Internet disrupted just about everything. In many cases, the disruptive technologies associated with the Internet were huge opportunities to do things better and faster, but it required an executive team that was willing to take risks. Things that are so obvious to us today — like registering a URL to protect your brand — weren’t necessarily obvious in the early days. Because the Internet was initially about infrastructure and faster communication, there were many opportunities to become more efficient. If your system had been using dial-up electronic bulletin boards before the Internet, you were more likely to understand how to leverage the new technology faster and better. But in many cases, franchisees drove the change or adopted technologies ahead of the franchisor because it was so accessible. This helped move systems forward and caused lots of distractions, especially for brands that were slow to adopt a strategy. Even Bill Gates initially misjudged the impact of the Internet and later failed to see the importance of search engines until it was too late. Gates said it best himself: “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” The primary lesson I see is that disruption from within your organization is better than disruption from external forces.

More and Faster

Today, we see more technological change on a much faster scale and we all know that keeping up requires resources. Either the social or mobile revolution would have rivaled the impact of the Internet, but they occurred at the same time creating an exponential disruption. Trendsetters like Uber, Zillow and AirBnB are disrupting long-established industries that have been relatively unchanged for 100 years. We’ve all seen entire industries completely disrupted by technology and innovation: video rentals, photo developing, music and traditional media just to name a few. Big thinkers like Google are aiming at what they call “moonshot ideas” like the driverless car and balloon-powered Internet that will ensure the entire planet has access. When we first hear of these ideas, it’s pretty easy to dismiss them as crazy or impossible, but we have an entire generation of big thinkers with the Steve Jobs’ mentality of anything’s possible.

The Ripple Effect

The unintended consequences of technology are often as powerful if not more powerful than the initial innovation. Take for instance, the ripple effect of the driverless car, which continues to look more like a reality every day. Just about every auto manufacturer has introduced technology that can react much faster than humans along with a long-term strategy for autonomous vehicles. When they become fully autonomous, the extinction of drunk and distracted drivers alone would dramatically impact many businesses: DUI/accident lawyers, auto insurance agents and adjustors, body shops, hospitals, doctors, auto parts distributors, car dealers just to name a few. Similarly, think about how a driverless car might provide opportunities or improvements to your industry. In my case, our field technicians could remotely access our customers’ systems while driving from one location to another. The increase in revenue potential and productivity would be measurable and impactful, especially in large congested markets. Completely new products and services that don’t even exist today might be possible from just about any innovation that shakes things up. Wearable technology, the Internet of Things, and 3D printing are just a few of the technologies that are emerging as key innovations right now. How might they impact your business?

Winning the Future

By now, you’ve likely come to terms with the fact that this environment of constant change is here to stay, so embracing it is the first step. Every system needs to be doing strengths, weaknesses, opportunities, and threats analyses on a regular basis to ensure that someone is watching the horizon for both opportunities and threats. Adopting the habit of labeling any technology or innovation as an opportunity, threat or a distraction can help you clarify priorities and help you align them to your overall strategy. I’ve had the pleasure of serving on the International Franchise Association’s Blue Sky Committee, which allowed people to untether from today’s realities and think big. Forming one of your own and including your key suppliers may be a way to gain valuable insight and ideas that will help inform your long-term vision. I’ve been in the technology space for more than 25 years, but trying to manage all of this change internally and stay focused on franchisee growth is nearly impossible. Finding suppliers that are leaders in the various disciplines and emerging technologies makes keeping up much more efficient. Ultimately, we are all here to serve our customers, so don’t forget to talk and listen to them. It’s the best way to help you keep tabs on trends that are relevant to what your customers want, not what you think they want. Today’s digital environment allows us to efficiently communicate, test and measure just about anything, so don’t suffer from “paralysis by analysis” on new ideas and remember failure is an option on small-scale tests.

Ken Colburn is president of Data Doctors Franchise Systems, Inc. He serves as chairman of IFA’s Marketing and Technology Committee and is a member of the FranSocial Advisory Group. Find him at fransocial.franchise.org.