Harvard Business School professor, the late Clayton Christensen, in his 1997 book ,?“The Innovator’s Dilemma”, first introduced the concept of “disruptive innovation”, explaining how cheaper, simpler or unexpected products and services can bring down gigantic corporations. In the past twenty years, the last five in particular, ‘disruption’ has become a guiding star for small, entrepreneurial start-ups and a favoured buzzword for large organizations who have hailed it as the link they have been missing in order to stay relevant in an oversupplied marketplace. However, the theory of disruption is perhaps fast falling prey to its own popularity today owing to gross misunderstanding and mis-application, with enthusiasts missing the fact that successful disruptive innovators ( or?challengers) cannot coexist with uniform rules in a dynamic market where old world manufacturing behemoths are?jostling for relevance with business models of newcomers that were unimaginable a decade ago. And the over-emphasis on embracing disruption as a rule, rather than as an alternative, has resulted in a lot of unnecessary mess at organizations who seem to be getting nowhere despite their conscious efforts at disrupting themselves.
Let us try and examine why the disruption theory might be overused , and (sometimes) abused after all –
- Businesses follow cycles?– Carried away by fads of fancy that are born out of success stories of small disruptors, many large organizations start taking these exceptions as the rule and try to clone them into their own house. This could be stupid and disastrous. A large externally financed infrastructure project, for example, has a predefined gestation period that cannot be shortened to meet your quarterly numbers, just because you read an article where a soda company is following a certain quarterly revenue rhythm that seems to be amazing . New initiatives like digitization of your portfolio are essential for existence today, but they need patience for implementation and they cannot follow the established rigor of existing businesses in your kitty.
- Markets need the right sizing?– Bitten by the disruption bug, we are witnessing a lot of cross-pollination among industries today, which is both good as well as bad. While borrowing lateral thinking from adjacent industries offers breadth to your strategy, it could also bring in errors in sizing your available market. How often do we see a new leader brought in to lead an organization, and who brings in his loyal team from his old company, and together they project a market that doesn’t exist. And lost in Utopia, they go on a hiring spree, recruiting ten people for a market that needs five, and later, on realizing that they are overstaffed (?at the end of a few quarters) resort to firing eight of those ten people, resulting in?asking the leftover two to do the job of five. And then one day, these two also leave owing to work pressure. And hell breaks loose. Sounds familiar ?
- Shareholders Vs Customers?– Organizations owe everything to the shareholders and working towards maximizing returns for the shareholders should be one of the prime objectives of any organization to sustain itself. However, beyond this obvious responsibility, lies the larger purpose of why an organization should exist in the market place in the first place . Driven by the frenzy of investor pressures, many large organizations succumb to disruptive strategies for a quick return on the buck, and end up confusing the market and forgetting the customer’s place in their priority chart. And when customers turn away from you, you end up doing a huge disservice towards your investors ultimately. So, be it a product or a service or your simple responsiveness to market dynamics, making/ keeping your customer happy should be your driving force. Period. Everything else would eventually follow.
- Leadership needs to be?earned?– This era of heterogeneous industrial warfare has given birth to a category of leaders who I call?‘ accidental leaders’?– bright MBAs with polished resumes and who excel in over-analyzing industry data while drawing strategies?around a market they have never set foot on. In the good old days, leaders were grown from the field. You had commercial leaders start from the dust and grime of the sales field and move up the value chain the hard but effective way. Similarly,?for technocrats , you had folks who worked for years in factories and labs before being given decisive leadership positions. In today’s instantaneous world where every youngster wants to ‘?make a contribution’ within a year into his first job and who aspires to be the CEO by the age of thirty, you often see management ( and a clueless HR)?scrambling to ‘create successes’?out of pre-determined candidates by setting them up in soft assignments, and not allowing them the opportunity of baptism by fire. These candidates then grow into leadership positions and make major calls of buying / selling businesses they have no clue of, and truly end up disrupting the organization . Downwards.
- The Uber myth?– Contrary to what many people conclude, Uber can hardly be described as a disruptive innovator. Unlike disruptive start ups, Uber neither started at a low end of the market ( with a ‘good enough’?product), nor did it create a new market where none existed. Also, unlike disruptive start ups who never venture mainstream till they bring up their quality, Uber?started?mainstream and with a quality that was?abovethe market mean. And they sustained and built on it with innovation and continuous improvement . Furthermore, Uber was able to navigate through many teething hurdles by sheer virtue of being in the white space with much lower controls on what they could do or could not. Today, an established 50 year old conglomerate cannot possibly try to emulate the Uber Go-to-market strategy, simply because it has a long list of checkpoints to navigate before it does that. Most established organizations cannot play the start-up game because unlike start-ups, they are not faceless and unaccountable.
- People are not mere ‘ resources’?– In the age of dramatic disruption that seems to have become a norm, employees are no longer considered assets for their capabilities and values, but only when they happen to be inside a box that agrees with the organization’s short term priority. And when they are not, they are tossed around, humiliated, made redundant and handed pink slips without the slightest of remorse or the minimum consideration for their decades worth of loyalty and knowhow. While driving crisp accountability is a must, however, when you start treating an employee as disposable, you lose commitment of your troops, even of?existing ‘safe’ employees who are aware that it is just a matter of time before they too would be in an unsafe zone. A few decades ago, most people would spend their entire professional lives in one organization and have a fierce sense of belonging for it even decades after their retirement. That’s how brands are born and trust is built. Some countries like Japan still value this. According to a report published by the Bank of Korea on May 14, 2008, investigating 41 countries, there were 5,586 companies older than 200 years. Of these, 3,146 are in Japan. That should give you a flavour why disruptive?‘hire and fire’?might not be good for your long term sustainability.
- The execution gap?– Today it is common to see large corporations step in and out of businesses every few years and most conglomerates today operate on medium-cycle portfolio management rhythm rather than sticking to a core for which they stand for. This again has its advantages and flaws. While such a practice keeps organizations lean, agile and offsets single-industry risks for them, this could also prove detrimental to execution of businesses. Infrastructure organizations, for instance, do not have their business cycle end at the order, but they also need to flawlessly execute their projects for timely revenue recognitions , market reputation and repeat business. However, in the fast paced and disruptive world of today, we often see companies focused on the immediate reward (?i.e. the inflow of business) and not mindful of efficient execution. How often?we hear of situations where projects are delayed and are facing penalties because the erstwhile project team members were made redundant and fired during the lean period and the new recruits are incapable of finishing the job at hand because they lack training , adequate information and experience.
In conclusion?- A comfort zone is definitely not what organizations should allow to creep in, especially in today’s super-competitive world. However, they should also strike a balance when it comes to embrace and force radical change. While a certain degree of disruption is good to keep your forces alert, too much of it might not be a good idea, especially when you start disrupting for the sake of disrupting. After all – businesses are about human beings. And human beings by nature, seek equilibrium, not disruption.
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This is a chapter from my 2020 book, 'As You?Life?It'. A big thanks also to my reader friends for such a generous response to my new book, 'Life-ing?it'. You may grab a copy at Amazon ( links below) or Flipkart ( India). If you are in other countries, Google Play, Smashwords etc also have it instantly available).