Misunderstanding Disruption: The Unforgiving Ignorance of MAD

When we first socialised the ideas in Disrupted, we received some flack from a variety of sources.

Some in business didn’t see the need to understand the true nature of disruption. They were confused by the spin around ‘digital disruption’ as both the problem and the cure. Equally, many were focussed on making the most of business as usual and thinking about incremental innovation — as long as it didn’t cost too much and provided an immediate return.

The academic business gurus seemed to want to hold a mortgage over their specific disruption theories — often laid out in fairly narrow form. Sometimes with a focus only on the impact on products and services and in other forms as something that start-ups could use to innovate and destroy conventional markets.

While the drumbeat of disruption has taken many forms, we were always driving the point that disruption was, and is, about something MUCH bigger.

Disruption was and is about multiple systems — social, economic, environmental, technological, political, transport, energy, education, etc. — dramatically changing at an exponential rate and converging to cause large and in many ways irreversible impacts.

In that context, where disruption is everywhere and exponential, we could see that an ability to ‘change ahead of change’ would be critical for anyone who wanted to actively seek opportunity and mitigate risk in these environments.

In working with organisations over the past 20 years what we have seen and experienced for more often than ‘changing ahead of change’ is MAD — Managed Adaptive Decline.

MAD can occur anywhere and at any scale — in individuals, organisations, communities and countries. Put simply MAD is a state of adaptation to ever-declining conditions in a very well-managed manner. Like the frog in the warming water, at first all appears fine. BUT, as the water heats, the frog gradually adapts until its capability to act is severely diminished and it realises it can’t escape. Thus, the frog has adapted for too long, failed to change ahead of change and is condemned to wallowing in the water until it boils to death.

Let’s hope we are, both individually and collectively, better than an army of frogs.

Larry and David

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The dictionary defines disruption as “disturbances or problems that interrupt an event, activity, or process.” But for some time now the word has also been used to describe the radical developments that bring new products and markets into existence. It would seem, then, that disruption is both destruction and creation. It’s destruction that becomes creation over time. Or else it’s creation that becomes destruction over time. Good news becoming bad news and bad news becoming good.

Uber is the world’s largest taxi company and they don’t own any taxis. Airbnb is the word’s largest hotelier and they don’t own any accommodations. Skype is one of the world’s largest phone companies and they don’t own any telecommunications infrastructure. Netflix is the world’s largest theatre company and they don’t own any cinemas. Facebook is the world’s most popular media channel and they don’t create content. Apple and Google are the world’s largest software vendors and they don’t write apps.

This is more than digital disruption. This is the deliberate squashing of conventional business models, backed by an investment sector that has moved on from just funding the next best widget, to start-ups that can successfully disrupt business models. And quickly.

A banking CEO whose organization lost $2 billion USD worth of shareholder funds in the wake of the global financial crisis said: “No one could have reasonably foreseen these circumstances.” We want you to know that he and his blinder-wearing ilk are wrong. By the time you have finished this book, you’ll understand that it is possible to both foresee transformative disruptions and to leverage them for your own benefit and the benefit of the people in your organization.

Furthermore, leveraging the disruptions you’ve seen over the horizon is a capability, a philosophy, and a way of life that will only become more crucial with the passage of time. We are now in an “elbow” of exponential change, when the forces that have driven disruption over the course of history are converging and reaching a series of tipping points.

As these tipping points mount up, we have seen many organizations across the United States and Australia succumb to the same fatal illness our “reasonable” banking CEO suffered from. We call it M.A.D. or Managed Adaptive Decline, and it occurs when an organization or a community ignores “bad news” and then develops elegantly efficient yet ultimately futile strategies for coping with its disruptions. By “going lean” or “managing harder” they divert energy away from solutions and further exacerbate their fundamental ills. Like the proverbial frog in the pot, they accept their fate in a spirit of wilful ignorance and passivity, and by the time their business model is boiling to death, it’s too late to evacuate the cookware.

We believe that those who pay attention to the temperature changing underneath their feet are well positioned to win big. The opportunities in this exponentially accelerating era are immense. There is plenty of good news for disruption-leveraging individuals, organizations, and industries. We want to give you an alternative to the strategy and planning methodologies that might be steering your organization into the hot water of M.A.D. After all, you can’t use the same tool that caused the damage to fix the problem. It’s time to update your strategic thinking — and quickly — if you want to avoid falling into a pattern of teeth-gritting decline.

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A Series of Insights from Disrupted, the Book

Written in 2015, Disrupted was, and still is, both a book ahead of its time, and a timely guide for those committed to understanding and addressing the complexity of disruptive change, preparing for disruption, and critically, leveraging disruption to generate sustainable value.

This series of articles are extracts — some with comment from the authors — from the book and are intended to highlight some of the key concepts captured in Disrupted.

“Few people genuinely understand systemic disruption. So having a practical guide to advise on strategies for leveraging new possibilities is highly valuable. I read about 150 books a year. But Disrupted: Strategy for Exponential Change is a book that I have sitting on my desk all the time — ready for constant referral.” Richard Hames — Executive Director, Centre for the Future

To find out more visit: www.resilientfutures.com/disrupted