Ripping Up The Status Quo
Why businesses should aim to be disruptors rather than victims of disruption.
It’s hard to imagine a world in which watching a movie involves a walk or drive to the nearest video rental shop rather than simply scrolling through the Netflix menu screen. And yet that world did exist and it wasn’t too long ago. The arrival of streaming services for music, TV shows, and films was an example of disruption writ large. Overnight – or so it seemed – old business models were consigned to the dustbin of commercial history. New players had completely reshaped the entertainment marketplace.
Or to put it another way, the status quo had been torn to shreds.
But let’s spare a thought for those who have been disrupted. The travel agents who closed their doors when online holiday and flight booking fuelled a do-it-yourself travel boom. The mobile handset manufacturers that struggled to create products to compete with the all-conquering iPhone. And of course, the video rental shops that were once a feature of every high street.
Now, not every business responds to disruption in the same way. Some try to swim against the tide and ultimately founder. Others embrace the wave of change and perhaps become disrupters themselves. Others “get by” and perhaps carve out their own niche but that is unlikely to be a sustainable position in the longer term.
But the truth is that all businesses – whether incumbents or new kids on the block – need to be ready for disruption in their respective sectors. They need to be watchful of disruptive competitors and trends in the marketplace. More importantly, they must be prepared to innovate themselves. It is better to disrupt than be disrupted should be the mantra.
Where do the Disrupters Come From?
Most businesses habitually assess the competitors in their markets but tech-enabled disrupters have posed a particular challenge in recent years. Why? Well as Gartner has pointed Jeff Bezos did not work in retail before he started Amazon and PayPal’s founders had no grounding in banking. Yet both used technology coupled with a product-focused vision to shake up their chosen markets. They came from left field and they weren’t easy to spot.
But tech disruptors can also be disrupted. As Mark Zuckerberg’s Facebook ascended to the status of tech giant, social media pioneers such as Myspace and Friends Reunited shrivelled on the vine. Now Facebook’s empire is under pressure from the likes of Tik Tok.
Staying Tuned to Disruption
So how do you avoid becoming a victim of disruption? Well, it’s worth taking a leaf out of the book of the businesses that have succeeded in staying ahead of the technology curve.
Companies like Apple do not simply create great products, they monitor the activities of rivals and the emerging – sometimes barely visible – technology trends that have the potential to reshape the world. Indeed, that is part of the job of CIOs and CTOs. They oversee the research, forecasting and analysis necessary to identify the trends. Then they identify areas where their companies can and should invest. It is no accident that companies such as Google, Apple and Amazon are continually investing in cutting edge technologies that are not necessarily adjacent to their core businesses. As Gartner’s Disrupt or be Disrupted report put it: “Disrupters are not one-hit wonders.”
Sometimes leaders see the threat. Bill Gates quickly identified that Netscape – a pioneering web browser – was a threat to Microsoft’s domination of the software market, simply because it provided a cross-platform means to access services. Microsoft’s own strategy changed as a result. On other occasions, the potential for disruption is not recognised or acted upon quickly enough. For instance, Kodak, while still a money-spinning business, does not dominate the consumer camera and film market in the way it once did.
Becoming a Disruptor
It’s not enough to stay tuned to potential disruption. Companies must prepare themselves to take full advantage of the technologies that rivals will surely bring to bear.
Gartner recommends that companies develop “formal and urgent strategies” that will see them looking beyond their current business models. For instance, there will be opportunities to self-disrupt by creating new services and customer-friendly ways of doing business. This may involve looking at ways to serve customers more effectively, finding new demographics or changing the go-to-market model.
The lesson of modern disruptors is that technology will be the key to redefining markets. Uber didn’t invent the idea of the taxi, but what it did do was develop a technology platform that opened up driving as an option for a large swathe of people who could supply their own cars while providing a mobile-first booking system.
All the evidence suggests that technology will continue to enable new business models. For instance, 5G networks – such as Verizon’s 5G Ultrawideband are providing businesses with speed, flexibility, and capacity. In addition to improved communications, they also connect the Internet of Things (IoT). This in turn provides a platform for new services such as driverless delivery vehicles.
But the networks are simply platforms. The challenge for businesses is to consider how to use the technology and capacity to become truly disruptive.
