Disruptor or disrupted?

Not for Profits that invest in the quality of their interactions within both their existing communities and their potential communities, have little to fear from disruption, CEO of Community Council for Australia, David Crosbie writes in Pro Bono News.

Disruptor or disrupted? Pro Bono News, 13 September 2016

Most of the charities and not-for-profits I have spent time with commenced their lives as disruptors.  They were driven by a need to change the current state of things, to offer support where none existed, to create opportunity, extend and innovate beyond what was possible.

For this reason, I am always interested when I read or hear about the not-for-profit sector being disrupted.  What does that mean?

When I use the term disruption, I am talking about what I think is seen as the classic form of innovative disruption.  This definition is fundamentally about cheaper and sometimes inferior products coming into a market, or in the case of charities and not-for-profits, into communities.  The disruptors capture a small part of the market and then build both quality and market share over a period of time.  There are also emerging theories about almost instant disruption occurring overnight when cheaper and superior alternatives to existing products or services explode onto the market.

Most financially significant charities and not-for-profits started small, offering something different, pushing for change that would benefit the community.  Over time, they developed specialist knowledge and skills which enabled a growth in the organisation.  Their share of their market grew from a small base to a larger base as the range and extent of activities and services increased.  They disrupted what existed and grew as a consequence.

For many of these successful organisations, there are new challenge.  Their specialist activities are being replicated by other organisations, sometimes cheaper and more efficiently, not always with the same quality.  There are new technologies that appear to offer cheaper solutions to some of their activities and competitors with scale and efficiencies.  They are increasingly at risk of being disrupted.

The bad news is that the level of disruption is not only increasing, but the rate of disruption is speeding up with digital innovation, scale, globalisation and other factors all driving accelerating change.

It seems that in the not too distant future, many of our call-centers may be replaced by avatars who can not only be customized to our needs (language, appearance, tone, etc.), but also have a complete knowledge of our transactional history, what options are available to us, and the capacity to listen, process and empathise without judging us.

Experiences in the US, China and other countries with prototypes like ‘IBM Watson’ are highlighting the scope for artificial intelligence to improve effectiveness in areas like medical diagnosis.  Watson is able to almost instantly cognitively process massive amounts of individual and collective information.  Diagnostic accuracy is greater than with human doctors for some diseases.  Marry this information processing ability with the more futuristic gaming and computer created characters that interact with you as a unique user, and the disruptive potential is enormous.  IBM is just one of the big players in this space – Google, Microsoft and others have artificial intelligence prototypes being tested.

The good news is that while this seems like scary stuff, it has the potential to improve human interaction and create new ways of relating across our communities.  IBM Watson cannot replace a doctor, but it can work with a doctor to improve their practice.  It can also learn from every interaction, operate in a cloud, 24 hours a day, across any almost any distance, making some health and diagnostic services much more accessible.

The challenge for the not-for-profit sector is to consider what role we will play as technological and other disruptors enter our areas of activity.  Striving to keep things the same is probably not going to work, but what do we offer?  Very few, if any, not-for-profits have the capacity or the resources to develop and refine cutting edge technological solutions to the issues they address.  Some organisations have tried to invest in this space, but it is almost impossible to stay ahead of the technological innovation curve if that is not the core focus.

What is now emerging as one of the most critical elements to successful implementation of artificial intelligence is not just the technological capacity, but the quality of the relationships it enables, or the user experience.  This sounds very familiar to me.  For some time, leaders in the not-for-profit sector have been saying how important it is to be able to demonstrate the quality of engagement with their communities, the capacity to establish and maintain trust building interactions.  These critical interactions enable change to occur, even when they are framed within transactional activities.  In other words, values and relationships are critical to success.  

Not-for-profits that invest in the quality of their interactions within both their existing communities, and their potential communities, have little to fear from disruption.  They are the advocates and the enablers of change.  As organisations, they will be able to use emerging technologies to show how they can and do make a difference.  While the methods for communicating and interacting may constantly evolve along with changing roles of governments and varying income streams, it is strong and meaningful community engagement that is most valued.

When I talk with Boards and CEOs, I usually ask about their vision, their measures of success.  Sometimes the first response is about success being measured by income levels, or size, or continuing the services they run.  More often the response I get is about making things better for a particular community and a commitment that only when the community they serve is stronger and has greater opportunities, will they be successful.  What makes an organisation strong is being able to show how they establish and maintain relationships that enable real and sustainable change to occur.

The not-for-profit sector are disruptors, at least to the extent that they are focused on their role in building flourishing communities.  For as long as this is the primary driving focus, they will continue to change and evolve as disruptors rather than being the disrupted, regardless of their size and the diversity of their activities.