Sunday, June 12, 2016

DocuSign - Blue Ocean and the Art of Disruption

In reading the book excerpt, Why Good Companies Fail to Thrive in Fast Moving Industries and Discovering New and Emerging Markets" (Christensen, 1997) and the article “Blue Ocean Strategy” (Kim and Mauborgne, Oct ’04), I was able to draw some parallels with DocuSign, a company that I have previously worked for.

DocuSign was initially founded to provide a mechanism to electronically sign digital documents.  The business model was originally based around keeping documents digital throughout their lifecycle instead of printing, signing, faxing and/or digitizing.  On it’s surface this seemed like a no-brainer.  The challenge, initially, was that there was not much of a market.  Many larger organizations had existing document management systems and were reluctant to move to a new and untested technology.  Enter the iPhone.  Once mobile devices became more capable and the Internet browsing capability began to reach par with the desktop experience, DocuSign adoption started to grow very quickly.  The convenience of signing a document while ‘mobile’ was a game-changer.  This is a good example of disruption as discussed in “Why Good Companies Fail…”.  

Over time, DocuSign started to see more and more competition in the electronic signature industry.  The company, still relatively small and agile at the time, looked at what it’s mission was.  Some people would think that DocuSign saw competition as a bad thing, but it was quite the opposite.  Competition legitimized the industry and helped to drive future growth.  In fact, DocuSign saw the pen and paper as it’s primary competition rather than other organizations in the same space.  Given this, the company focused on disrupting the pen and paper in both personal and business environments.  This approach led to focusing on things like security and integrity of the documents and ability to validate the senders and signers in ways that hadn’t previously been possible.  In focusing on revolutionizing the process, DocuSign started to market its services as “Digital Transaction Management”.  This change, from “Electronic Signature” to “Digital Transaction Management” is, I believe, a great example of adopting a “Blue Ocean” strategy within an existing organization.

In order to remain relevant DocuSign has and continues to innovate, paying particular attention to disruptive technologies and technology application.  As stated in “Why Companies Fail…” one of the primary challenges organizations have as they grow is the ability of the organization to rapidly adapt to changing dynamics.  To this end, DocuSign invested early in a dedicated R&D department which is operated independently of the existing product management, product development, and engineering departments.  The R&D department functions as an internal incubator and partners with other organizations to define and develop new use-cases.  The motto of this team is “fail fast”.  Innovation and risk-taking is encouraged and failure is not seen as a bad thing.  This approach, while hard to manage on a larger scale, is possible due to the completely different organizational structure. 

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