Is Technology A Disruptor Or An Interrupter?

Change is never ending for the contemporary business. And you can blame technology, says Ben Edwards, vice president at payments company PayPal. Organisations have no choice but to keep pace with the rapidly changing consumers behaviours.

But introducing technology that advances the company without interrupting the core business is challenging.

Case in point is 1-800-Flowers, a 35-year-old company that started as a single flower shop in New York. In 1986, Jim McCann, owner of the Flora Plenty florist, became one of the first retailers to use a 24/7 toll-free telephone number when he purchased the number 1-800-Flowers. It was clearly a successful strategy and from those simple beginnings, there are now 15 brands within the portfolio. These range from cookie company Cheryl’s to gift basket service 1-800-Baskets.

Today, the business continues to invest in new technology. Amit Shah, senior vice president of marketing, says: “One of the great privileges of working for 1-800-Flowers is that early adoption and being on the cutting edge of innovation is a DNA level element of this company.”

The business was quick to act whenever new technologies became available. For example, 1-800-Flowers was one of the launch partners when Facebook released Facebook Gifts in 2012, a service the platform closed two years later. Last month, 1-800-Flowers was one of a handful of companies partnering with Apple to launch Apple Pay on the web. More recently, it released a module built on top of IBM’s artificial intelligence platform Watson called Gifts When You Need or GWYN that provides consumers with purchase recommendations based on multiple data points.

But while 1-800-Flowers may be ahead of the tech curve today, that doesn’t mean it is free from disruptive risk.

And that is a familiar lesson for PayPal.

Founded in 1998, PayPal stole an early march on the payments space well before banks and mobile handset manufacturers finally struck back, and new app developers entered the fray.

According to Edwards, “PayPal is only 18 years old and it is being profoundly disrupted by many, many, many different sorts of payment companies, device companies, e-commerce companies, banks, local companies, global companies. If you paint the payments landscape it’s a roiling ocean of disruption.”

He draws a parallel with his former career as a reporter, editor and Executive Vice President for The Economist. “That’s a business model that was pretty stable for about 500 years, based on the invention of the book and the printing press. The product itself was very stable. We all knew what a magazine was. Then suddenly with the advent of the internet and digital publishing and digital media, the entire product is in complete flux. We don’t know what it is. We don’t know how it works. We don’t know what customers want from it.”

The current state of the publishing industry, Edwards believes, is indicative of 21^st century business where business models are constantly challenged. He says, “We are on a journey of continuous improvement. It isn’t like we’re going to go through a period of transformation and then emerge from the other end with the solution. We’re going to transform from a company that doesn’t transform into a company that transforms continuously. That is the new state of being.”

Given this, Edwards says, “There’s a need, in part, to disrupt your own business.”

It’s a fine line, however, between disrupting and interrupting the business with the introduction of tech. Edwards says this challenge requires a new breed of leader.

“The successful manager of this sort of organisation is a very different manager from the successful manager of the sorts of prior organisations where the product and value proposition was more static,” he says. “We were focused on quality and scale. We need to be focused on cultures and teams that enable continuous learning or, as I’ve begun thinking of it, as being growthful. As managers, how do we help people to want to point themselves at continuously upgrading and learning new skill sets and how they work with colleagues to evolve the product and the company?”

While fostering an environment of constant evolution is one thing, knowing when to jump to the latest platform or offering is something else entirely.

Three steps

For instance 1-800-Flowers’ Shah says: “You have to try things out first, jump in quickly. We have a three-step process of asking ourselves that question. The first question we ask is, does it have enough scale to be a testable hypothesis? For example, if you say that virtual reality is gaining a lot of traction, the question we would ask is, ‘Are there enough headsets in circulation that you can get ethnographically driven real consumer data?’”

Shah also says it is important to question whether a piece of technology will significantly improve the user experience.

And finally, is it something that might deliver a basic return on investment goal.

In the middle of all this are the people implementing the technology and Shah says they cannot be overlooked. He says: “On a human level, it is still a daily challenge because a lot of people under appreciate that innovation is not just opportunity creating. It is also anxiety-inducing to a great degree because you are now asking teams of people who might have devoted significant cognitive and learning ability to build you the best in class experience. Suddenly you come in and try to disrupt that or push it aside.”

Edwards believes this state of being – being open to constant change – in an organic property within us that’s been suppressed. Perhaps the greatest test for businesses in the 21^st century is unlocking this ability to enable technology to disrupt without interrupting.

This article first appeared on B&T’s sister business site www.which-50.com and was written by the editor, Andrew Birmingham.

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