The WEF report states that: "As combinatorial technologies solve problems that individual technologies could not, they do more than shift where value accumulates – they increase the total value available to the market.”
Here, they are describing Schumpeter’sCreative Destruction — how higher-order systems create new sources of value, which attract capital away from components whose value has now peaked. This fuels the creation of the new on the destruction of the old.
Figure 11: The new created on the destruction of the old
No organisation owns every component in its value chain. All RUN on efficient, reliable sub-components that are widely available — from electricity, to cloud, and now LLMs.
Ecosystems form and seek to create new sources of value on top of these platforms. Most of these innovative efforts fail, but the few that find their market DISRUPT the current ways of working.
As more organisations start to adopt the new, the pressure to CHANGE grows for everybody — at first, this is about extracting value from the new, but eventually, it’s required just to stay in the game.
This cycle of creative destruction repeats endlessly — what was once a potential source of future value evolves to become a platform on which a new, as yet uncertain, future will be RUN.
The question is: how to monetise these stages.
Five Generic Monetisation Strategies
The future is uncertain, but not everything is unpredictable. A Wardley Map provides us with situational awareness —the ability to see how value is created today and where this is changing. Now we can identify strategic moves to extract value from the cycle of creative destruction.
Run-based Strategies
Scan weak signals: Do users complain about value for money? Does the idea for a utility service exist? Is the technology available? Can we build something suitable? This is a potential platform.
Industrialisation: With predictability about WHAT will appear (a utility-like service) but not WHEN (as incumbent players are stuck behind inertia barriers) be a first mover and occupy the future.
Disruption-based Strategies
Componentisation effect: After a sub-component industrialises there’s high predictability about WHEN the new will appear (now) but not WHAT it’ll be. Be a fast follower so you don’t fall behind.
Explore the uncharted: On the left of a map there’s low predictability about WHAT will appear or WHEN. Action is full of uncertainty and risk. Here you experiment and gamble with the new.
Change-based Strategies
Focus on evolution: Here there’s predictability about WHAT will appear (a more evolved version) but low predictability about WHEN. Get close to users and respond quickly to emerging needs.
Figure 12: Five Generic Monetisation Strategies
Run - Disrupt - Change (in that order!)
All organisations have different types of people — Pioneers, Settlers, Town Planners — who are adept at different types of challenges. By utilising aptitudes intelligently organisations can make moves across their entire landscape and out-compete rivals. One master of this game is Amazon.
Frustrated at continually re-building the same, low-value adding components as they expanded, Amazon sought to turn computing into a utility-like service. The idea and technology were already there. They only had to make something that would satisfy their own needs first (all weak signals).
As an industry outsider, Amazon faced minimal internal resistance to this change. They were able to build a service (EC2) they — and every organisation — could RUN their value chains on. Eventually, this led to an explosion of new products and services that DISRUPTED multiple industries.
Amazon’s founder, Jeff Bezos, had glimpsed this future and forced his organisation to CHANGE to take advantage of it. He told every internal team to expose their systems through service interfaces, “or be fired”. This mandate became the architecture EC2 was built on.
Entire industries adopted the new ways of working — such as DevOps and Agile — that the cloud unlocked. Those that adapted best captured new sources of value. Those who didn’t saw a trickle of talent and users leaving turn into a flood, with capital following them.
Today, Amazon continues to play a sophisticated game: providing platforms on which industries RUN, stimulating ecosystems to innovate and DISRUPT markets, then integrating the components that CHANGE the game into their ever-growing platform — squeezing out the competitive space for rivals.
Figure 13: How Amazon eats industries
Amazon’s gameplay has given it a reputation today for:
Cost-efficiency: due to economies of scale that the platforms they RUN enjoy
Innovation: despite their ecosystems, not Amazon itself, being the force that DISRUPTS markets
Customer-orientation: adding the CHANGES that marketschooseto their ever-growing platform.
Amazon eats industries through superior situational awareness. With a Wardley Map, you too can start to see how the game can be played in your industry.
Figure 14: Benefits of RUN - DISRUPT - CHANGE (in that order!)
Conclusion
In a changing technological landscape, competitive advantage comes from how well we combine novel technologies and practices with established ones to unlock new sources of value.
Wardley Mapping helps us see our landscapes more clearly, identify the technologies to run on and where to disrupt the status quo. The trimodal model: Pioneers - Settlers - Town Planners enables us to make the internal changes we need to exploit the potential in the new.
We have to move on from a static understanding of ‘Run, Change, Disrupt’ (RCD) to a dynamic one, where we ’Run - Disrupt - Change (RDC) — in that order!’ and shape the landscape to our advantage.