Disruption – Threat or Opportunity

I took part in an event hosted by the Greater Manchester Chamber of Commerce. The subject under discussion was how businesses had used disruptive strategies to secure new business.

As part of my preparation for the event, I researched the subject of disruption.

Let’s start with my definition of disruption in the commercial world, ie. “a radical change in an industry, market or business model”. We are not discussing adapting pricing strategies or attempting to sell into a new sector here, this is a revolutionary change. This is the type of market change that wipes out entire sectors just as the automobile and trains wiped out the need for 100,000 horses, and as many supply chain jobs, in New York and London over a few short years a century ago.

Check out the Great Horse Manure Crisis of 1894 for more detail https://www.historic-uk.com/HistoryUK/HistoryofBritain/Great-Horse-Manure-Crisis-of-1894/

The key for me when I consider disruption is the word “radical”. Not a word we would commonly use in the business world as we typically seek consistency to allow us to make long term plans and investments

When I am asked to provide examples of disruption I turn to personal experience. Let’s consider how my experience of enjoying a good film has changed in my lifetime.

? 1970’s A 40-mile drive to buy a ticket to the cinema to watch a film. (My favorite memory is of course Star Wars at the Odeon).

? 1980’s Sitting in a student flat, surrounded by friends, watching BBC and ITV prescribed films on the old TV.

? 1990’s A walk around the corner to the local video shop to rent a film of choice (then pay the penalty for late return).

? 2000’s Watch a film from an expensive CD or downloaded (slowly) from the internet to watch on my PC.

? 2010’s Streamed films available on-demand where and when required and delivered across a plethora of devices

? 2020’s – Immersive looks most likely but your guess is as good as mine. But I assure you there will be change.

Now if you are in your 50’s or older I’m sure you’ll identify with this timeline but trust me none of us could have known that these radical changes were heading our way. And the ones who didn’t plan for these stages of disruption were typically those incumbent players in the industry. The disruptors came from outside the sector and typically used technology to enable change.

We have all of course personally experienced a profound change in our world over the last year first from the threat of a health emergency and subsequently, the introduction of changes to our work practices to address COVID eg. working from home, social isolation, communication via Zoom, homeschooling…..

In this case therefore disruption, we must assume, has had a negative effect on us as business leaders, especially if our business falls into sectors such as retail, travel, hospitality etc.

So have businesses taken disruptive moves simply because market conditions have forced them to over the years? Certainly, in some cases this is true but also there are numerous examples of companies that have made strategic decisions to disrupt their market with new business models and have benefited massively.

The brands are iconic today, Tesla, Facebook, Ryanair, Airbnb, Uber, Linkedin, Aldi, and the rest.

In fact, I would postulate that over the coming months unless you are in a position where you are clear that your market will return to a “pre-COVID normal” (who are you?) then it’s time to think about how you can take the lead in changing your market to meet new customer needs.

But where to start? Well for me step one in any strategic move is to analyse your market. Consider what are the likely drivers over the coming months and years, and where could that market gap develop which you can exploit. Educate yourself on previous recoveries from recession, get involved in new initiatives and groups where you will find like-minded individuals and be sure to check out how companies like yours are adopting in other markets such as the USA.

The most critical stage is then to analyse the data and pull together a strategy to follow. Here I would urge you to take council. Develop your plan, but share this plan with trusted advisors, key clients, and customers and see if they buy into your logic. Take on board this feedback, define a detailed tactical plan, and execute. And by execute, I mean to make that move now, don’t delay.

Once in the execution phase ensure you have defined clear KPIs and review these regularly to see if your plan is working and if not adapt as necessary. Remember it doesn’t matter if a KPI is under-hit or over hit you still require to adapt your plan, ie. there is no win in overselling unless you can also deliver.

When running to a disruptive model it is key that you have crystalised a clear vision of what you want to achieve and that you can clearly articulate the “why”. This is most important when securing buy-in for your plan from team members, investors, and the general market. The best advice is always to be communicating.

So is disruption a threat or an opportunity – the answer is easy it's both…. Sorry but true. However, it’s only a threat if you are the one being disrupted it is certainly an opportunity if you are the one doing the disrupting.

Disrupt away

An edited version of this article first appeared in The Daily Business in February 2021

#disruption #leadership #change