What Does Disruption Mean For You?

What Does Disruption Mean for You?

Let’s say for a moment you head up a successful, established organisation.

With decades as a market leader, you’re experiencing all the hallmarks of success – significant market share, strong sales and consistent growth. Sure you have challenges but in general, life in the organisation is good. You’re consistently meeting your targets.

You begin to hear rumours of a new startup on your turf.

Your team does some research. It’s a tiny venture with scant resources and few processes. It’s targeting customers your organisation doesn’t service. These customers just don’t fit your ideal consumer base. Their prices are efficient, likely unsustainable. At most, they’re a distraction. Good luck to them.

You continue your quest for improving margins, market share and inevitably, profit. Onward and upward.

Twelve short months later, you’re hauled in front of the board to explain why the organisation’s market share is eroding. Who is this competitor that our customers are flocking to? Why are they providing our services at a discount of 75%? How did we – read: YOU – not see this coming?

It’s almost impossible for organisations of scale to turn on a dime.

  • How can you change your mindset to attract, embrace, and act on, the opportunities that come with disruption?
  • How can you examine and review your processes and your structures to make better use of your time and your resources?
  • In times of overwhelm, what do you need to do to keep up? How do you cope? How do you adapt? Are you able to be agile and adaptive in setting your strategies?
  • How do you stay “ahead of the pack” or ahead of the disruptor?
  • What skills do you need to develop, and to thrive?
Free Download
Download a copy of The Disruption Report 2016: What Australian Business Leaders Think to learn:

  • The 6 key emergent themes on disruption
  • Opportunities and risks inherent in the current climate
  • What Australian business leaders are doing right now about disruption

Are you ready for disruption? Or are you living through disruption? Or are you on a treadmill and need a disruptor to ‘shake it up’ and act as a catalyst for creativity, transformation and action?

In The Innovator’s Dilemma, Harvard Business School professor Clayton M Christensen distils disruption into two key areas:

1. New-market disruption:

A disruptive product addresses a market that previously couldn’t be served.

2. Low-end disruption:

A simpler, cheaper or more convenient alternative to an existing product.

The reason (why companies fail) is that good management itself was the root cause. – Clayton M… Click To Tweet

Netflix

Netflix is amongst other things, the ultimate disruptor of Blockbuster – and video stores.

Like all great disruptors Netflix didn’t initially go after the core customers of competitors like Blockbuster. It started with an opt-in mail order service, those people that were just movie enthusiasts or early adopters of DVD players. They didn’t target Blockbusters main customers who were after new releases as soon as they were available.

This is a hallmark of disruption. A disruptive company targets segments of the population that have been overlooked by its competitors, delivering an inferior (but more tailored) alternative, often at a lower price.

How to find a Disruption Expert

Learn how to choose the right disruption expert for your organisation using The Disruption Speaker Scale.

Then, eventually, a disruptive company like Netflix moves upmarket. It keeps the advantages it had at the beginning and adds the things mainstream customers want. All of a sudden, there is no reason to have Blockbuster anymore. In the case of Netflix, the huge shift came with the rise of streaming video. Netflix was able to appeal to Blockbuster’s core audience by providing, “a wider selection of content with an all-you-can-watch, on-demand, low-price, high-quality, highly convenient approach.”

The reason disruptive companies often rise so quickly is that incumbents overlook them. Click To Tweet

And just like that, Blockbuster collapsed.

The reason why disruptive companies are often able to rise so quickly is that their larger competitors overlook them. They are not initially competing for the same customers, so the big guns brush them off.

Wavestorm

Or what about Wavestorm, a company which sells surfboards for $99.99 and are offered exclusively at discount warehouse Costco? The company entered the bottom of the market, or more. Even the brand’s cofounder Matt Zilinskas is not shy in saying that he realises the folks who can only pay $99 today will likely be willing to spend far more in the future….

Traditional businesses are scrambling to address disruptors from stealing too much from their bottom lines.

Sometimes, the best disruptions come because someone is able to catch and ride a wave. Source: morningnewsbeat.com

Traditional businesses are scrambling to address disruptors from stealing too much from their… Click To Tweet

Air BnB

The hotel business is being disrupted. Air BnB is not only a threat to the hotel industry; it is actually disrupting the hotel and travel industry. It’s adding new entrepreneurs to the hotel business, as anyone with an additional room to rent can now be an hotelier.

It’s one thing to have a new competitor enter the field. It’s a whole other thing for an innovator to come in and disrupt the entire industry.

At least 60% of Airbnb’s rooms are located in the top 14 markets, meaning that Hotels with significant holdings in large cities are getting hurt worse.

It’s one thing to have a new competitor enter the field. It’s a whole other thing for an… Click To Tweet

Next steps


About the Author

Ashli Payne

Share this Post

Leave a Reply

Your email address will not be published.