Disruption is not just for high-tech or new businesses. Disruption happens when another business or entrepreneur hits your market with a better version of your product or service. If you’re not thinking ahead, chances are someone else can find a faster, easier, cheaper, or more convenient way of accomplishing what you offer. Every business is vulnerable to disruption---unless they can disrupt first.
Why Plan for Disruption Now?
Businesses have always adapted to change, but the current pace of change is dramatic and unprecedented. With the sands shifting around you, it pays to understand the forces at play in your industry and develop a plan to stay ahead of them. Those who are able to adopt a disruptive mindset soar above the competition. Those who cannot adapt risk being overtaken. In practical terms, companies fail because they over-invest in what they’re good at today and under-invest in what they should be good at tomorrow.
Learn to leapfrog the competition in our Disruptive Innovation course.
Understanding the Disruptors in Your Industry
For most industry incumbents, disruptive competition is coming from two sources: small entrepreneurs and digital giants. Businesses are feeling the squeeze world-wide as the internet and digital technology make it possible for disruptive forces to reach new markets and impact parallel industries on the other side of the globe. Whether it’s a scrappy underdog providing your core customer group with a streamlined experience, or Google remaking the playing field, remarkably different forces are putting pressure on companies to innovate or risk being overtaken. More than ever, the ability to spot and react to disruption is an important business skill to possess.
Looking for Spaces to Disrupt
Whether you’re analyzing your competition to understand their offerings, or searching for new business ideas, disruption plays out in three primary areas.
First, it’s helpful to look at your industry through the “jobs to be done” framework. Current, disruptive giants have upended the way we complete tasks. Think of Lyft, Airbnb, Kindle, Venmo—these companies help you travel, read, and pay for things, but in a completely new way. The new disruptive framework insists that consumers don’t buy products, they hire products to solve problems in their lives. What areas are frustrating for your customers? Is there an opportunity to accomplish the job differently, or reimagine it entirely? Thinking about your business offering in this context can help you strategize where your industry could go. If your business isn’t focused on these areas of friction another organization will seize the opportunity.
Second, look to areas of your business that are changing rapidly, or have sudden new market players. If a competitor has already emerged in your space as a disruptor, it’s not too late. Instead, it’s an imperative for your business to pivot. The pressures of competition will often catalyze established businesses that are slower to evolve. With some earnest reflection and redirection, your solution can be stronger than your competition’s.
Third, oftentimes a disruptive solution requires a new business model. As you think about where your business is headed, you may need to consider different strategies for monetizing what you offer. If you’re pioneering a disruptive solution, or capitalizing on a disruptive idea in your industry, adjusting your business model is often the next logical step. This can be a painful switch, but often an operations overhaul is the only way a business can support disruptive innovation.
Future-Proofing Your Organization
When your business responds to disruption, it’s challenging to balance the demands of the present business, while retooling it for a future state. Future-proofing is managing these two competing requirements: defending your core business while designing the new. This mindset is necessary for the risk of disruptive innovation to pay off. For example, Netflix started out renting DVDs and continued this service to customers while developing the streaming capabilities that it’s known for today. The shift from DVD rental to streaming subscription was a transition for the consumer and for their business, but the risk paid off. As DVDs waned in popularity, Netflix was already prepared to capitalize on the next big opportunity.
Justifying Your Disruptive Idea
Disruptive innovation is exciting and it’s fast-paced, but it’s anything but random. Successful ideas are well thought-out and have solid business cases to back them up. Understanding your market and familiarizing yourself with a disruptive innovation playbook will give your good idea the structure necessary to be successful against the competition.
A disruptive mindset keeps your business from falling behind. Leverage Carlson Executive Education’s course on Disruptive Innovation to build the skills and mindset you need to act on your next big business opportunity.