It’s simultaneously a threat and an opportunity, but it doesn’t have to be costly or intimidating. Incremental change is often the key.

By Arnold van Graan, Head of Market Research at Nedbank Corporate and Investment Banking.

During the inaugural Nedbank Innovative Disruption Conference, I took a moment to reflect on the times we live in. Change doesn't just loom on the horizon; it races toward us with unparalleled speed. One lesson rings true as we stand on the brink of what feels like constant revolution: disruption is everywhere. In our fast-evolving business world, while many chase the latest technological marvel, breakthrough product or game-changing service, and aiming to be the next big disruptor, it's crucial to navigate this fast-paced landscape with discernment.

The challenge lies in differentiating lasting innovation from fleeting trends and not mistaking mere noise for genuine signals. The pace of innovation has reached such heights that today's disrupters are often tomorrows disrupted.

Consider Checkers Sixty60, which shocked competitors in the already-disruptive online grocery business by promising deliveries within an hour. Launched in 2019, just in time to benefit from the Covid-19 lockdowns, it's now available through 466 stores. After chalking up sales growth of 150% between 2019 and mid-2022, it grew by another 81% in the following 12 months.

The service has helped Shoprite Holdings to grow its market share even during a time of minimal economic growth, and the company will soon scratch its disruptive itch again by launching a monthly subscription model, similar to Amazon Prime, aiming to increase Checkers' 15% market share.

Disruptions like these are rooted in innovative thinking and the use of technology, and they transform industries, displace market leaders, and reshape how products and services are made and delivered.

It all sounds incredibly exciting, but not if you're involved in a business on the wrong end of the disruption, stuck with a conventional business model that is being destroyed by an upstart.

And wherever people work, there's a good chance they'll feel the heat because the flames of disruption are perpetually being fanned in numerous directions by new technologies – most recently by the arrival of generative artificial intelligence (AI) and ominous warnings about its impact on employment.

That makes it vital for businesses to understand how disruptors reshape the competitive landscape. Companies that fail to adopt disruptive strategies or that cannot adapt to innovations introduced by competitors will find themselves at a disadvantage that could end up being deadly.

In discussions at the Nedbank Innovative Disruption Conference, delegates gained an understanding that disruption means more than being on top of advances in technology, as important as these advances are. At its heart, it involves businesses recalibrating their definitions of value to encompass more than just money.

Intuitively, the Checkers Sixty60 fee of R35 can hardly cover the cost of fulfilling someone's order and delivering it to their door in less than an hour. For Shoprite, however, the service builds market share, customer loyalty and brand recognition, not to mention making its rivals' lives difficult as they try to respond.

It's not as if the company had to invent anything to introduce the service. It needed an app, staff to fulfil orders and a delivery team equipped with smartphones. The disruption lay in how the company repurposed existing methodologies in a novel way to produce a new result. In doing so, it pinpointed a gap in the market and filled it by giving the supermarket business model, essentially unchanged since the 1960s, a bit of shock treatment.

For organisations such as Nedbank, innovation is not an end in itself. It is a pathway to client-centred solutions in which technology is leveraged to understand clients' needs and then meet them.

This approach is typical of many businesses. Disruption emerges as visionaries grapple with tangible market problems, often leading to collaboration and diversification as technology lowers the barriers between industries. A good example of this is the way telecom companies have begun to offer banking services.

Diversification can deliver ethical and regulatory challenges, particularly when gathering personal data and with the burgeoning role of AI, so disruption is also often characterised by controversy. Uber's rise introduced a modern alternative to traditional metered taxis, while Airbnb ushered in a new era of property dynamics, changing the landscape of conventional rentals, and offering unique accommodation experiences for many.

These developments and the emergence of promising new technologies with disruptive potential tend to hit the headlines. Still, successful disruption isn't as common as media coverage might suggest, according to Jonathan Haenen, Head of Client Service and Digital at Nedbank Corporate and Investment Banking.

Speaking at the conference, he referred to the Gartner Hype Curve, which tracks the lifecycle stages of emerging technologies, starting with the breakthrough that catches the attention of early adopters and the media. It's followed by hype and exaggerated claims, typically by what the research and advisory firm Gartner calls the 'trough of disillusionment'. This is where many disruptive dreams are snuffed out by technical challenges, failed implementations, or unmet expectations. Haenen says the failures are far more numerous than the success stories that make it up Gartner's 'slope of enlightenment' to the 'plateau of productivity'.

That's why, according to Haenen, organisations should resist the temptation to aim for big disruptions and scale down their aspirations. He says smaller innovations resonate with consumers, and because they are attainable, they have a higher success rate. Haenen also believes the most impactful innovations start at the grassroots level, with employees in the thick of daily operations who have intimate knowledge of their inherent inefficiencies.

By the same token, he's sceptical about the growing pressures from consultants and self-professed experts who are critical of the slow pace of innovation, even when a lot of the buzz about technological breakthroughs fails to produce tangible benefits for a company or its clients. He believes much of the hype in the realm of innovation is based on fear, either fear of missing out on the potential gains from a nascent technology or anxiety about becoming obsolete, when what is really needed is informed decision-making.

The pace of innovation is faster today and more transformative than at any point in human history due to technological leaps, access to information, global collaboration, investment in research and development, shorter product lifecycles, and entrepreneurial growth.

For many, it's a threat, but simultaneously, it offers enormous opportunities. The real challenge societies and policymakers must navigate is ensuring it benefits humanity rather than doing the opposite.