Tuesday, September 20, 2016

Is Disruption All It's Cracked Up To Be? by Lionel Belen


It was Clay Christensen, a professor at Harvard Business school, that coined the term disruptive innovation. Since then, it has become one of the most commonly used ideas in the tech startup community, to the point that it has entered the mainstream. 

Disruption or disruptive innovation, Christensen proposed in his case studies, was what happened when small startup companies developed new innovative solutions or discovered unserved or underserved markets that allowed them to topple their bigger, more established rivals. (Check out: The Innovator’s Dilemma 1997, Seeing What’s Next 2004)

One great example of this would be between Amazon and Borders. Amazon, which started as an online bookstore in 1994, is today one of the world’s most valuable companies, selling all sorts of goods (not just books) to consumers. In 2015 it surpassed Walmart as the most valuable retailer in the United States based on market capitalization, and today its revenues surpass a hundred billion dollars. On the other hand, Borders, which was established in 1971, had at its peak almost 20,000 employees and more than 1,300 stores around the world, but in 2011 filed for bankruptcy.

You might wonder: How did Amazon beat a rival with a 20-year headstart?

Many would refer back to Christensen’s thesis and say that Borders was disrupted - that Amazon had learned how to develop and offer a better solution - e-commerce, a better business model; online payments and customer fulfillment; and even access to more customers and new markets.

Yet, as enticing as disruption is as an idea and management theory, it’s just one of many theories and frameworks out there.

In an article published in The New Yorker, entitled, “The Disruption Machine”, author Jill Yore offers a great rebuttal (and overview of such arguments) against Christensen’s thesis of disruption.

She makes three main points. The first point implicitly stated is that there are other theories and frameworks such as Michael Porter’s Competitive Advantage. To add, I would also put forward his other theory of The 5 Forces.


Michael Porter’s 5 Forces
Competitive advantage, put simply, is where a company succeeds and beats its competitors either by being the cheapest and having the lowest costs, or by being the most different/differentiated. The 5 Forces, meanwhile, attests to the role of external factors - like suppliers, new entrants, substitutes, buyers, and industry rivals - and the degree of influence or ability of a company to manage these factors in order to survive.

Arguably, both theories also fit the Amazon and Borders example. Amazon was an innovative business model - but at the end of the day, it might have boiled down to the competitive advantage of being cheaper and differentiated compared to borders. And who is to say Borders just couldn’t manage against external forces better than Amazon? After all, theories wouldn’t be theories if they weren’t widely applicable.

The second point Yore makes is that within the many examples or cases that Christensen identifies to prove his theory, there are many inconsistencies as well.

“...Seagate Technology was not felled by disruption. Between 1989 and 1990, its sales doubled, reaching $2.4 billion, “more than all of its U.S. competitors combined,” according to an industry report. In 1997, the year Christensen published “The Innovator’s Dilemma,” Seagate was the largest company in the disk-drive industry, reporting revenues of nine billion dollars. Last year [2013], Seagate shipped its two-billionth disk drive. Most of the entrant firms celebrated by Christensen as triumphant disrupters, on the other hand, no longer exist, their success having been in some cases brief and in others illusory. [emphasis mine] (The fleeting nature of their success is, of course, perfectly consistent with his model.) “

The last point Yore makes in her article is simple yet poignant. While many wish to use as a means to predict the next big thing, Christensen’s framework stands better as an explanation of the ultimate success or failure of companies. At best, it is a pattern seen in retrospect and not a predictor of the future.

Instead of looking at disruption as the “end all and be all” for companies in this age of technology and information, I think what’s most important is to consider what is at the essence and heart of these concepts. That…
  • Today the world is changing faster than it has ever been before. With this rapid change comes change in the business conditions and the needs of customers;
  • That the challenges faced by companies are to adapt and keep pace with these changes while solving their customer's problems most effectively and efficiently.

With everything said, the aforementioned theories and cases lead to one fundamental point: He/she who makes the most customers happiest, fastest and in the most efficient way possible wins the day. And, ultimately, all businesses or business owners should already know this.


© 2016 OCEAN


This post is part of a blog series promoting Open Collaboration with East Asia New Champions (OCEAN) Summit 2016 in Bohol on November 24-26, 2016, with the theme: The Future of Industry and Impact. There will be a session on The Disruption of Industries: The next decade in digital transformation.

To know more and participate, go to http://www.ocean16.asia/.


http://ocean16.asia/blog-disruption




Sustainability: A Farmer's Perspective by Enzo Pinga


In recent years the word sustainable has walked into the territory of watered-down buzzwords. It has risen to become a main topic of discussion in numerous conferences, multilateral talks, political agendas, etc. But what does it even mean? Am I being sustainable if I recycle? Sustainable has replaced boring, buttoned-up words such as profitable, green or ‘long-term’. It is the new sexy, in danger of losing its avant-garde status by being the apple of everyone’s eye.

So what has prompted the theme of sustainability to be so mainstream? I am inclined to say that on a global scale, growing recognition of continuing down this current path has brought about fears of leaving a future where our descendants are worse off. The need for an alternative to how the world advances has brought about hope and innovation. Business has been the single-biggest creator of value that mankind knows. And what other way is there for the human race to leverage and move forward with?

In the past, sustainability may have been described as ‘hippie-talk’ or unrealistic, unfit for the current state of the world. This is now gaining increasing influence on the global political and economic agenda as evidenced by high-powered meetings such as the COP21 meeting. One can point to rapid industrialization as the culprit to our woes. The earth is continuously being destroyed by the footprint that mankind leaves behind to serve our “needs”, rapidly depleting and polluting natural resources.

Agriculture is not an exception to the rule. Farming is big business as everyone needs food to survive. Agriculture has allowed our species to evolve from hunter-gatherers to establishing civilizations. The industrialization of agriculture has wreaked havoc on the environment, killing forests, soils and bodies of water.

With a rapidly growing population, food production must increase with it. The population is expected to increase to 9.5 billion people by 2050, with most of them living in cities. This growth necessitates a 60% increase in food production based on current demand. This is a staggering number because, as it stands, agriculture accounts for a third of the world’s greenhouse gas emissions and uses two-thirds of the world’s freshwater resources.

Industrial farming kicked-off post World War II where bomb-making factories switched to the manufacturing of fertilizers to serve a population devastated by war. These initiatives were further pushed by the Green Revolution of the 1970’s promoting industrial agriculture as the solution to global hunger with the use of chemical inputs. Has it been successful? In a way, certainly. These methods have helped produce more food than we can consume. However, this feat does not come without a cost.

Industrial farming relies heavily on chemical inputs, oil, GMOs, and unnecessary transport of food across the planet. Interestingly, it is the small-scale farmers that are responsible for 70% of the food we consume globally, and not the large-scale industrial farms.

Here are some more astounding numbers. Out of 7 billion people, 795 million go hungry everyday while we waste one-third of the food that is produced. The world produces enough food for everyone but it does not get to all of those in need.

Solving food security is not as easy promoting more small-scale farmers. Industrial agribusiness will not simply disappear. We need to find ways to make their practices more effective through partnership and prevent the colonization of food production and distribution. In order for small-scale farmers to be at the forefront of the transformation in agriculture, granting access to support is necessary to overcome the challenges they face.

Sustainable farming practices call for the increase in soil carbon content, the optimal use of organic and inorganic fertilizers, international trade reform, land management for crop and livestock production, the reduction of food waste, a change in dietary patterns, to name a few. Only then can agriculture be less resource-hungry in an increasingly scarce world, work to regenerate lands, natural resources and ensure proper health and nutrition for mankind.


© 2016 OCEAN


This post is part of a blog series promoting Open Collaboration for East Asia New Champions (OCEAN) Summit 2016 in Bohol on November 24-26, 2016, with the theme: The Future of Industry and Impact. There will be a session on Sustainability at the Heart of Business: How to Innovate Responsibly. To know more and participate, go to http://www.ocean16.asia/.


http://www.ocean16.asia/blog-sustainability




TOP TECH EXPERTS AND CHANGEMAKERS TO CONVENE IN BOHOL FOR OCEAN 2016 SUMMIT: Summit readies region for next industrial revolution


MANILA, Philippines – Filipino Young Global Leaders and Shapers recognized by the World Economic Forum are getting together and gearing up for the Open Collaboration with East Asia New Champions (OCEAN) 2016 Summit from November 24 to 26 at the Be Grand Hotel in Bohol.

Chief Organizer Winston Damarillo, a WEF Young Global Leader said, “This year in Davos, we talked about the 4th Industrial Revolution – how high technology will promote rapid industrialization and how digital can impact lives for the better. We want to make sure that all emerging countries don’t miss out. We don’t want to miss out.”

“Our goal for OCEAN 16 is to take the whole concept of the 4th Industrial Revolution beyond the think tanks and the people talking theories in Davos. We want to bring it to emerging countries like the Philippines at the grassroots level,” he added.

Started in 2014 by Damarillo with fellow WEF Young Global Leaders, Karen Davila and Senator Bam Aquino, OCEAN aims to encourage local and global leaders to work together and strengthen the ecosystem for innovation, technology and creativity in the Philippines.

OCEAN 14 brought together over 200 changemakers from all over the world to Mövenpick Hotel Mactan Island in Cebu. Panel discussions covered Inclusive Entrepreneurship, Sustainable Social Initiatives, Environment in the Next Decade, the Creative Economy, and Igniting Private & Public Partnerships. Attendees included Tony Meloto, Maria Ressa, Manny Osmeña, Geena Rocero, Jeffrey Tarayao, Cherrie Atilano, Carlo Delantar, Lynn Pinugu and Anna Oposa.

Notable outcomes from OCEAN 14 include the Start-Up Business Bill, a proposed legislation to provide tax exemptions to young companies; the Hope Now Foundation, which activates mobile hospitals in response to natural disasters; and a bamboo school that facilitates active learning for the youth in Bohol.


What’s going to Bohol?

For this year’s OCEAN Summit, the WEF communities, led by Young Global Leaders and Shapers, are bringing discussions from Davos to Bohol. They will confer on the applications of technology in driving inclusive and sustainable growth in the region. 

OCEAN 16 will focus on the question, “How can the Philippines – and other emerging countries – harness new technologies to accelerate economic development and social progress?”

The three-day summit will feature keynote addresses from government, business, and civil society leaders; plenary sessions on entrepreneurship, innovation, the Philippines, and the global community; interactive brainstorming sessions centered on how to scale emerging, youth-led social solutions; demos of cutting-edge new technologies including drones, 3D applications; and a maker market of goods from local artisans and entrepreneurs.

The Summit will also introduce and feed into a roadmap for “Digital Bohol” – a plan for holistic digital inclusion in Bohol that aims to set the standard for how local leaders can collaborate to harness technology to empower business, government and civil society.

Bohol was selected to pilot the smart city movement because of its strong public and private partnerships, and its vast work building its ICT infrastructure towards becoming a tech hub. It is also set to become a global destination with the opening of the Panglao International Airport in 2018.

OCEAN 16 signed a memorandum of agreement (MOA) with the Provincial Government of Bohol and the Bohol Chamber of Commerce and Industry last August 15, as part of a joint initiative for the development of smart cities in the Philippines, starting with Tagbilaran City in Bohol as the pilot and model city.

“Technology plays an important role in society and we’re very excited to be one of the first LGUs to start utilizing it to develop smart cities, enable disaster preparedness, promote inclusive economic development, boost tourism and ensure the safety of our citizens,” says Bohol Governor Edgar Chatto.


Top Filipino experts from Silicon Valley talk about social impact of tech

Top Filipino executives from Silicon Valley will be coming to share the best practices in world technology at OCEAN 16 – Mark Damarillo, Apple Lead Engineer for iDevices, will be talking about wearable technology and its potential to enhance lives; and Pepe Torres, AirBnB Regional Brand Marketing Manager, will talk about the impact of Sharing Economy in the Philippines.

“Bohol will be a whole new experience. It’s a microcosm of what we want to achieve for the theme of this year’s OCEAN,” says Damarillo. “We want to share the lessons from the World Economic Forum to local leaders and benefit communities in the Philippines.”

“For improving the state of the world, we want to talk to the people whose conditions we can improve using technology. Bohol is a good place to see the social impact of this new digital revolution,” he added.

Summit interactions will tackle the following topics:

The Future of Talent: Cultivating a new generation of leadership
The Disruption of Industries: The next decade in digital transformation
Powering Small Business: MSMEs in the digital economy
The New Oil: Harnessing the power of data
Sustainability at the Heart of Business: How to innovate responsibly
Collaborative Governance: Solving problems beyond private and public
Innovation for All: Democratizing the Fourth Industrial Revolution
The Next Economic Power: Navigating the ASEAN collaboration
Preparing for the Digital Future: Where we are and what’s next

OCEAN 16 is co-organized by the WEF communities in the Philippines; Amihan Global Strategies, a digital transformation consultancy; and Kaya Collaborative, an international nonprofit that connects the global Filipino community to entrepreneurship, impact, and innovation in the Philippines.

For more information, visit www.ocean16.asia, email info@ocean16.asia or call 0947-813-6401. You may also participate in online discussions by following OCEAN 16 on Twitter, Instagram or Facebook @WEFPHOCEAN.



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