An age-old problem explored in the excellent read The Innovators Dilemma: how do you manage to disrupt your competition without being disrupted yourself? This week from the the AdHocnium Catalytic Podcasts comes a discussion on innovation at its core, and what companies can do to avoid becoming defunct. Today’s topic is Disruption and Chris Heuer is joined by Rachel Masters of Red Magnet Media, Bill Sanders of Roebling Strauss, Bill Jensen of The Jensen Group, and Mark Fidelman of Evolve! Inc. Each Catalyst brings their observations and experiences to the discussion on what it takes to be a disrupter in the digital age.
The dilemma of disruption is that after a company has become successful through one avenue, they are challenged to identify the next big disruption and harness its potential before it undermines their core business. Oftentimes in periods of disruption, small competitors can come from very unexpected places and upturn seemingly stalwart industry leaders. It’s been a dilemma that companies have been trying to overcome through an increased focus on innovation, but that focus can sometimes fall at odds with corporate objectives of perpetual success and personal performance requirements which punish failure. True innovation, as Thomas Edison demonstrated, may sometimes require thousands if not tens of thousands of failures. Seemingly, this example and many others prove the need for companies to embrace failure in order to foster breakthroughs, rather than simply trying to turn every innovation into a victory and losing sight of greater potential for disruption.
In Silicon Valley, failure is seldom permanent, and second chances are seemingly given more readily than in other parts of the world. There can be a certain amount of fear associated with any potential for market disruptions, but it takes true leadership to make a move before being pushed by market forces. The Catalysts of AdHocnium strive to help our clients identify and realize new opportunities to be truly innovative leaders. A predisposition to seize new opportunities rather than mitigate potential risks is a key aspect of our client’s success.
Rachel Masters begins the conversation by bringing up the recent resignation of Barnes and Noble’s CEO, after the commercial failure of the Nook, B&N’s attempt to compete with other e-readers. Clearly, the traditionally successful bookstore is suffering for not managing to bridge their experience into the digital. While the Nook is a great product, Barnes and Noble failed to culturally embrace the transition to e-readers, and fell behind in terms of innovation.. Essentially, attempts to disrupt have the potential to create opposing factions within a company of those clinging on to status quo and those seeking to overturn it. If sales of books in the Nook channel are competitive with in-store purchases and with online sales, it puts the teams of company at odds with one another. Even when companies are doing the right things, the deck can still be stacked against them when success becomes a competition. More so when an individual’s performance metrics are being sacrificed for a new strategic objective.
Bill Jensen expands on the issues that can arise from internal competition, citing his experience with an industrial era company. After putting the company’s divisional strategic plans on one page, it became obvious that no team prioritized the funding of shared services (IT, HR etc.). By bringing this to their attention, Bill managed to facilitate a beneficial restructuring of the company. Companies that have difficulty communicating about basic things like common needs across the organization face a serious challenge, often failing to identify emerging threats in time. Bill goes on to say that sometimes companies have to “kill their baby,” a distressing phrase but an accurate one. In order to progress, businesses need to embrace a constant state of disruption in order to remain current, even if sometimes it means cutting previous successes loose. This is not necessarily a technology issue but a matter of leadership. The “kill your baby” mindset takes a tremendous amount of courage, and in order to avoid being disrupted sometimes difficult decisions have to be made.
Bill Jensen has a new book coming out on disruption entitled Disrupt! Think Epic. Be Epic. Be sure to check it out if disruption and innovation are topics you’d love to learn more about in greater detail. Bill also has another book for which he is well known entitled Simplicity, which does an excellent job at describing the process of securing competitive advantage for your business by simplifying and focusing on what matters most.
Later in the podcast, Mark Fidelman explains that IBM’s ability to get the whole company aligned to commit to a particular goal has allowed them to be a market disruptor for decades. Transformation has always been a priority for IBM, and their profits and growth serve to illustrate the success of their efforts. The more open corporate systems are, the easier it is to integrate with others in the network. Chris added that by redesigning their software to be built on their own API, IBM managed to better cross-integrate their solutions and interactions within their company. Disruptions can come from a variety of sources, and to illustrate this point Chris mentioned the interesting read Social Machines, which describes the phenomenon of household objects gaining access to social networks and the potential for disruption it creates.
Overall, avoiding disruption comes down to taking creative risks, becoming more connected as a company, streamlining communication, developing better market sensing capabilities to predict upcoming disruptions, and embracing a risk-taking mindset in order to foster new disruptions, instead of reacting to those created by others. The Catalysts at AdHocnium recognize the difficulty faced by companies who are seeking to disrupt their markets while keeping existing customers happy. However, those companies that do manage to disrupt have the potential to succeed in significant ways. Listen in to the fourth Catalytic Conversation on Disrupting before being Disrupted, and please share your thoughts below.