Tag: Disruption

Disruptive innovation

February 3, 2022

Disruptive innovation is a term first defined by Clayton M. Christensen in his book “The Innovator’s Dilemma”. Today his concept of ‘disruptive innovation’ is present in our everyday language about innovation. It is also applied to describe many situations relating to industry changes.

“If you defer investing your time and energy until you see that you need to, chances are it will already be too late.” Clayton Christensen

Understanding disruptive business

To explain his theory, Christensen uses a comparison of Netflix and Uber. A disruptive business is able to gain a foothold in a low-end market that has been ignored by established companies.
These disruptive organizations must in their own way create an entirely new market. One that turns non-customers in customers.

Despite these theories. Uber didn’t create a new market but sought customers who were already using taxi services. If it is true also that truly disruptive businesses start with a low-quality product that covers the mainstream market by improving quality, Uber does not fit this theory either.

” You’re not that disruptive. Stop lying to yourself!” Rameet Chawla

Christensen uses Netflix as a classic example of a disruptive business. The initial Netflix mail-in subscription service wasn’t attractive to Blockbuster’s mainstream customers who rented new releases ‘on-demand’. Netflix attracted only those who didn’t care about new releases, were early adopters of DVD players or shopped online.

They targeted segments of the population previously overlooked by competitors, delivering an inferior (but tailored) alternative, at a lower price. Eventually, Netflix moved upmarket by adding the things mainstream customers wanted. Then one day, there was no reason to use Blockbuster anymore. We agree that this is a great example of true disruption.

We think Christensen’s examples help to explain what disruption is and is not. However, we also believe that there could be a better example to use than Uber because it is a business which is platform-based (rather than linear) and, at one level, we believe that Uber has caused disruption.

Networks of Disruption

Once a platform has established a strong network around its core offering. It can easily tap into that network to unlock new customer groups and create new markets. Networks are extensible in a way that traditional supply chains are not. In fact, most platforms create new markets. They succeed not by building sustainable innovations but by introducing disruptive innovations. These are the things that build new networks, communities, and marketplaces.

This is what Uber has done.

We also challenge the technology obsessed view of disruption. It might be true that new technology uproots, and eventually replaces, an existing technology. Consider the way video streaming has replaced video rentals.

However, this description still misses the point because disruption is not driven just by technology. Instead, it is driven by customers. They are the ones behind the decisions to adopt or reject new technologies or new products and services.

Let’s look at Uber again. Customers valued the convenience and value of the Uber service. The driver community valued the flexibility of hours and service delivery model. Large companies should therefore focus on the changing needs of customers to respond more effectively to digital disruption.

“Those who disrupt their industries change consumer behaviour, alter economics, and transform lives.” Heather Simmons

Innovation is an important aspect in the conversation on disruption. But it is not always the case that newer technology makes for better business. This is why we prefer to take a broader view of the topic.

The Bigger Picture

We are rapidly facing an oncoming future of colliding megatrends. From rapid urbanisation, climate change, resource scarcity, and technological breakthroughs, to shifts in economic global power. All the while, navigating the currents of demographic and social change.

We know that these shifts are reshaping societies, economies, and behavioural norms across the world and redefining whole industries at a breath-taking pace.

We also know that technology is a game changer. But business leaders cannot be sure how they should be planning for what’s to come. The past is no longer a reasonable guide to the future. There is so much hype now, so many unknowns, and such a degree of volatility in every area.

Research shows that the ‘pace of change’ and related threats from business model disruption has become the top emerging risk for CEOs, with health care, insurance and industrials fearing its consequences the most.

“Most industries experience disruption not from the sudden impact of a single force, but rather from a collision of interacting forces, and often with multiple, related consequences.” Sean Murphy

The Future is Now

The notion of an organization with a fixed structure and supply chain offering a well-defined range of products or services in a stable market with a set of known competitors is disappearing fast. Now, and in the future, organizations should ‘create their next cutting-edge’ by embracing new technologies to develop potentially disruptive ideas, in and outside of their current industry.

Secondly, they should ‘fund their future bets’ by putting more time, money and energy into innovations that can test and turn new ideas into commercial realities faster.

Third, if organizations cannot build or fund the necessary skills and resources internally, they should find partners (including third parties and suppliers) to scale new ideas and provide access to technologies and specialized talent.

Finally, organizations should ‘disrupt from the inside’ by fostering an internal culture that views innovation as a benefit and establishing an ‘innovation lab’ or ‘digital factory’ to test new ideas. Successful companies like Google and Microsoft still spend billions of dollars trying to find new ways to avoid disruption by leaning into disruptive technologies, testing new ideas and learning how to remain close to the innovation frontier.

SERVICEBRAND

We also believe that we will increasingly see the development of collaborative ecosystems replacing the traditional organization concept. In this every changing world, why not see how the SERVICEBRAND approach can help you navigate, innovate and disrupt the competition!

The Big Reframe

January 6, 2022

Thinking about New Year resolutions

Several people have been very kind about this year’s wall calendar. Specifically, comments have been about how beautiful the photographs are (in particular how uplifting January’s photo is to start the year), appreciation of the values related lyrics for each month, the practicality of the calendar as a useful ‘tool’, how pleased people were to receive a surprise gift, and curiosity about the ValuesJam card game (did you see what I did there? 😉).

At the same time, because it is the beginning of the year, there is a lot of commentary and advice being posted on social media about New Year resolutions and goals/targets for the year. A conversation with ValuesJam co-founder Lisa Birtles caused me to reflect on the 2022 calendar ‘project’ in the context of how we approach ambitions for the year ahead.

By way of background, twelve years ago I decided to produce a wall calendar to send to people I had been involved with during the past year or even in previous years (clients, service partners, collaborators, family, neighbours etc) as a small token of appreciation. I enjoy photography so the concept was simple: select twelve photographs taken in the previous year (usually!) to create a practical gift with a personal touch. Then after a couple of years, a values-related quote for each month was added.

Disruption

COVID-19 had already made the 2021 calendar more of a challenge because of fewer international trips and this was even more pronounced during 2021 (ie the 2022 calendar content). Nevertheless, I was able to select twelve photographs that I was pleased enough with and reckoned that people would understand the situation. Everything was sent to the design and print company, the proof was approved and an expected delivery date was agreed for early December.

The day before the delivery, I emailed the company to find out what time of the day to expect delivery and, because the photos had been uploaded onto my laptop, deleted the photos from my camera. The next day, an email reply arrived from the design and print company stating that there seemed to be an issue with the resolution of most of the photographs provided. When I checked the files on the laptop they were about 10% of the resolution they were supposed to be… and I no longer had the photos on the camera in case the problem had been caused when they were transferred.

Did I panic? Was I upset? Was I frustrated? Yes. Yes. Yes. But this did not last long because I realised what was done was done. Even if the photos on the camera were of the right resolution, they no longer existed so this was irrelevant. Not for one moment did I consider any possibility that there would be no calendar. I was intent that people would still be opening their 2022 calendars and be able to enjoy them during the year. Instead, the focus was firmly on how to produce and send the calendars in the new circumstances. The question was “In the absence of a selection of photos from 2021, what are the options?” The first answer was “A selection of photos from previous years” and the idea of a ‘back catalogue’ concept developed.

Serendipitously, the first calendar was produced in 2011 (photos from 2010) so this meant that there could be one photo from each year 2010-2020 and an additional photo from 2021. Also, there was a ‘fit’ with ValuesJam and the music connection. The concept of the 2022 ‘back catalogue’ calendar was borne and it took a week to approve the new design, for production and delivery. Dispatch was a little later than normal, but most calendars have arrived in time for the beginning of the New Year.

In addition, an unforeseen benefit was that it was really enjoyable looking back over photos from previous years which were a reminder of some great places visited and associated memories – it was an even more enriching ‘process’ than usual. And finally, it was much easier to deal with this year than if the same issue had happened in other years with more photos from a variety of international locations.

So what?

So what has this to do with New Year’s resolutions? My take-aways from the 2022 calendar experience are all about the mindset and perspective you choose to adopt to what you are aiming to achieve as follows:
1) Goals (actions to achieve a positive impact) are generally more motivating than resolutions (giving something up).
2) Understand that the impact you are seeking to achieve is the ultimate aim and more important than the goal itself.
3) Be committed to delivering the desired impact. As Yoda says: “Do or do not, there is no try”.
4) Be flexible eg the goal can be adapted to deliver the desired impact if circumstances change.
5) Sh*t happens – get over yourself and move on.
6) RoE (Return on energy) focus
a) invest in what needs to be done rather than waste energy on what can’t be changed.
b) remind yourself of what you have invested so far, which will be wasted if you do not complete your goal, or a variation of it.
7) Be kind to yourself – you can only do what you can do with what you have got (thanks to Padideh Tosti for this gem).
8) Hold yourself to account – be creative, resourceful, and persistent (rather than give up).
9) Consciously consider your values to make choices and decisions easier.
10) Keep track of your ‘performance’, recognise successes and take action to correct shortcomings.

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