INSIGHTS

The dark side of disruption in the technology industry

  • April 19, 2021
 

Disruption is the buzzword of the technology industry. Its association with innovation and soaring profit makes disruption a highly sought after label — entrepreneurs dream of creating it and investors dream of finding it. However, some experts have criticised the technology industry’s obsession with the term and believe that it’s equally important to consider the negative impact a culture of disruption can cause.


What is disruption?


Disruption refers to a technological development that significantly alters the way things are done in an industry. For example, Apple disrupted the communication and camera industries. Netflix disrupted the film and television industries. Amazon disrupted the entirety of retail.

Disruption refers not only to a single technological breakthrough or organisation, but broader change. For example, the pandemic has caused widespread disruption by accelerating digital transformation. Many organisations won’t return to previous methods of operating, as shown by mass closures of physical locations, meaning this disruption will irreversibly change demand for associated employment and services.


The dark side of disruption


Whenever disruptive change takes place, someone loses out. For example, the rise of digital media is putting traditional platforms out of business. It’s generally assumed disruption is a good thing for the technology industry — but is this always the case?


High turnover


Disruption goes hand in hand with innovation and, as a result, we expect skyrocketing growth from disruptive companies. However, what goes up must come down. Over the past twenty years, only four companies have continuously held their position on the list of highest-valued technology companies: Microsoft, Intel, Cisco and Oracle. The rest of the list varies year on year, with newcomers shooting up, only to be knocked off the top spots by the next start-up. The lesson is clear: if you operate in a disruptive industry, you are also more likely to be disrupted.


Culture


The pressure to be disruptive can cause some companies to take on new initiatives (such as AI, DevOps, etc.), because they think they should and not because it’s the right move for their business. Cultural clash is often cited as the reason these initiatives fail. In addition, constantly having to adapt to new technology and processes is tiring. The pressure to ‘be disruptive’ can contribute to burnout — an enormous concern in the technology industry which, in a recent survey, 57% of people were said to be suffering from. The high demand the technology industry places on its members, including the need for constant growth and industry disruption, can create an extremely stressful environment for employees.


Ethical issues


Mark Zuckerberg famously encouraged his employees to, ‘move fast and break things.’ Since then, Facebook (and other social media platforms) have been under fire from everything to data privacy breaches, impact on mental health, exploitative advertising and harassment. Moving quickly may be profitable, but breaking things can create long-term damage to an organisation’s brand and action from regulators. 

There’s also the temptation for companies to over-promise on what their technology can deliver to raise start-up investment. The most scandalous example of which is Theranos, the company that raised over $600 million for blood analysis technology that didn’t exist. While fraud at this level is unusual, pressure to be disruptive encourages start-ups to make big claims.

A culture of disruption can be a positive thing, leading to innovation and excellence in technology. However, it’s important to know that this isn’t all disruption leads to. Pressure to deliver explosive growth may hinder slower, potentially more meaningful, change. And, at its most extreme, disruption may have a negative impact on both employee well-being and organisational ethics.