Waking Up to Disruption

As I have said elsewhere, I believe progress and disruption have been around as long as mankind has been around. What is different now is the pace and scale of progress and disruption.

An Accenture study of 3600 businesses in 2018 found that 63% faced high levels of disruption. This disruption is neither simple, sudden nor short-lived. Many, if not all, businesses or business models are subject to persistent, evolving and complex disruption.

Thus, it can only be foolhardy to think that any business / model is exempt from disruptive forces.

So, what to do about Disruption?

Basically, organisations respond to disruption in one of two ways:

Treat it as a threat with possibly everything to lose.

The longer a business or business model has been in play and the more dominant a position it has held, the more it has to lose. The longer the business / model has been in play the less likely the incumbents are to be innovative and the more likely they will be concerned with protecting their cash cow status quo. These incumbents are more likely to be followers, riding on the back of those who went before, who want to perpetuate rather than innovate. Almost by definition, these second, or later, generation incumbents, are often fundamentally not cut out for leading new initiatives and, the longer the business / model has lasted, the more complacent and entitled the incumbents will tend to be.

The longer a business / model has been dominant the less likely it is to be innovative, and the more likely it is to be disrupted. When disruption does come, they are more likely to react rather than respond. They are more likely to defend their position and try to extend the life of their business / model even in the face of their inevitable demise, sometimes very aggressively. They are more likely to feel fearful of the impact of the disruption and less likely to recognise opportunities in the disruption.

Which leads to the other possible response to disruption ….

Consider and evaluate disruptive factors as possible opportunities.

In the long term the only way for a business / model to achieve longevity is to be constantly evolving.

According to Sloan MIT, growth, and with it longevity, is traditionally achieved through ongoing product development, improved customer insights that offer opportunities to better satisfy customer needs, or grow or move into new or adjacent markets. A fourth approach, business model experimentation and innovation, has emerged. As the core business model often impacts on how effectively organisations apply other growth strategies it is becoming progressively more important to develop more innovative business models that are more appropriate for the changing world.

An example of business model evolution could be collaboration with an innovative disruptor where the incumbent could provide the newcomer accelerated market access, complementary solutions, or become a vital delivery channel.

According to OpenExO, an organisation could set up concurrent yet separate initiatives to both address the competitive response to external disruption, and to drive its own innovative disruptions from the edge of the organisation where it is not limited by inherent internal conservatism.

Accept and Prepare for Your Own Death

I have not come up with any counter arguments, so I believe it is vitally important to accept that whatever business / model / product you are invested in will come to an end. Sooner or later, it will die.

I advocate that you take control of, and manage, your business / model / product life AND death to your best advantage. Ideally this death is not extinction, rather the end of a phase or cycle within a larger and considerably longer life.

That is a topic on its own.