As this month’s Consumer Electronics Show demonstrated, technological disruption is everywhere. And it’s only accelerating. Driven by the explosion in mobile devices, disruption is challenging even the most well-established and well-insulated industries. And that includes providers of services as well as products. Think Uber. It’s threatening to plow down the taxi business like a pedestrian caught in the crosswalk.
Does your company have a plan to keep these threats at bay? We’d like to offer some suggestions:
Find ways to serve your customers better – before someone else does. In their book Big Bang Disruption, Larry Downes and Paul Nunes explain how market dominance can crumble quickly because today’s customers call the shots.1 If a tech-driven solution is cheaper, faster or more personalized, they won’t hesitate to defect en masse. And with customers driving the buzz through social networks, review sites and other information-sharing tools, word spreads quickly.
Companies that meet the needs of today’s well-informed, empowered online customers – facilitating timely access to and exchange of relevant information – will be the winners.
Take Sherpaa. Here’s a start-up that helps companies cut healthcare expenses by overhauling the delivery model. Before – or instead of – going to the doctor (expensive), employees first go online to contact Sherpaa’s helpful doctors and insurance advisors for advice (reasonable).
Always be on the lookout for threats – and opportunities. Start by considering your company’s doomsday scenario, then prepare for it. And keep your radar up for potential infiltrators. Start-ups often play around the edges, targeting customer segments others ignore before going mainstream.
At the same time, don’t forget to play offense. The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups advises to start with a blank slate and design a perfect version of your business, assuming no prior baggage.2 Write “future histories” so you can see who or what might block your vision, then get everyone on the same page.
Think about the future customers you want. Many are early adopters of disruptive change today, and savvy companies such as Wealthfront are wasting no time targeting them right now. The website of this automated investing service puts it pretty bluntly: why trust a money manager when “well-designed software can do a better job?” Investors on the front line of change seem to be listening. In its first two-and-a-half years, the company has gained more than $1 billion in assets under management.
Don’t play small ball. As The New Killer Apps states, real change comes about from a focus on big ideas, not incremental improvements.3 In other words, take a page from the start-ups (or competitors) aiming to crash your gates. Lowering the price or speeding up the service of an existing product isn’t their goal. Many are looking to upend an entire business model. Their starting point is an unmet customer need, and they may come at it in ways that pay little mind to the status quo. Why not take the same approach?
Cast a wide net. Tempting as it may be, don’t fall in love with one idea. It’s estimated that 95% of entrepreneurial ideas fail. In fact, failure has its own global community – Failcon – where innovators gather to learn from each others’ mistakes. Given that most ideas are likely to cause a mere rumble, not an eruption, generate lots of them. Then break them down into small pieces and test, test, test. The idea is to learn rapidly from small-scale experiments.
Open the kimono. In Big Bang Disruption, the authors explain how entrepreneurs approach things differently: “Instead of developing their products in secret, they work in the open, letting early users test and extend each iteration of their design.”4 As a result, they’re able to attract collaborators and investors, and create a dedicated user base to jump-start their efforts in the marketplace.
If you’d like to discuss how you can not only survive disruption, but thrive from it, contact us today. We’d be happy to help.
- Big Bang Disruption. ©2014 by Lawrence Downes and Paul Nunes.
- The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups. ©2013 by Chunka Mui and Paul B. Carroll.
- Ibid.
- Big Bang Disruption. ©2014 by Lawrence Downes and Paul Nunes.