Managing disruptive change

Disruptive change comes about when your industry faces complete upheaval. It could be driven by a small nifty competitor coming into your market and turning it upside-down with new products or way of serving customers, by new technology that renders your products obsolete, or by a pandemic that leads to travel restrictions.

The way you approach disruptive change is critical to your success – you have to respond quickly and with a fresh approach in order to survive, let alone thrive. This article gives you food for thought, with some of the latest thinking on the topic.

Managing disruptive change

Typically, leaders create their vision of the future based on their past experience. They set next year’s strategy and goals by analysing what’s worked before, recent trends, and latest revenue statements. It’s a natural response and aims to build towards an expected and planned future.

When disruptive change occurs, that planned future ceases to be relevant.  In these situations there are typically three responses, all driven by emotion:

  1. Minimise the disruption
  2. Recognise the disruption is happening but don’t realise the extent of the impact on the business
  3. Deny it’s happening – like the ostrich who sticks its head in the sand

When emotion hits us, it makes it much more difficult to remain calm and responsive, as our energy goes to managing ourselves rather than the work. Plus, it makes us hesitant and maybe prone to self doubt. Imagine the impact if this is the reaction of the Board!

Some of the world’s biggest businesses have got it wrong. As you probably know, Kodak failed to appreciate the invention of digital camera technology. Blockbuster was knocked out by the uptake of video streaming. And BlackBerry was soundly trumped by Apple.

So, remember, when your whole industry is in flux, you can’t rely on the past to shape your future.

Be brave, creative and start with a clean sheet of paper to create your vision of the new future. Understand your customer needs and where the opportunities could be. Try to imagine beyond that. Solve needs your customers didn’t even know they had.

For example, Google is about to disrupt the automotive industry. They have been working on autonomous cars since 2000 that integrate with Google Maps, and last year appointed an executive from Ford to join their Board. Google’s low-speed self-driving vehicles are due to launch in 2020. With a bit of crystal ball gazing, IHS Automotive predicts that most cars and commercial vehicles will be autonomous by 2050.

“If I had asked my customers what they wanted they would have said a faster horse.”
Henry Ford

Case study: Dyson

A lot of innovation is born out of adapting things that already exist. Here’s an example of disruptive change in action.

It took Dyson five years and 5,127 prototypes to develop his cyclone technology, but his bagless product turned the vacuum cleaner industry on its head.

Watch this video for Dyson’s thoughts on iterative design:

As you may know, Dyson’s ‘sweet spot’ is their engineering capability. They have turned this to different products, such as fans and hand driers.

Since 2013, the Gtech AirRAM has faced Dyson head-on, and taken the vacuum cleaner market by storm. Their product is cordless, and compacts dirt, dust and fluff into bales you simply drop into the bin.

It’s a lesson that you can never stop innovating.

This links to my article on innovation.

“I have not failed. I’ve just found 10,000 ways that won’t work.”
Thomas A. Edison

5 critical competencies

This extract is from Leapfrogging: Harness the Power of Surprise for Business Breakthroughs by Soren Kaplan:

Our inherently uncertain environment demands a new set of competencies focused on navigating disruptive change while proactively driving game-changing breakthroughs. Five leadership competencies are essential for success in today’s unpredictable world. These competencies need to be embraced by leaders, role modeled, and instilled into teams and individuals across the organisation.

1. A Leapfrogging Mindset
Leading disruptive innovation and change involves leapfrogging – creating or doing something radically new or different that produces a significant leap forward. People who possess an unyielding desire to create a breakthrough ensure that everything they do focuses on adding a whole new level of value to customers, the market, and the organisation.

2. Boundary Pushing
Pushing boundaries is important on two levels. On the personal side, people who live abroad, work across multiple functions, and surround themselves with diverse team members continually broaden their mindsets and enhance creative problem solving skills. From a strategic perspective, they push the limits of their colleagues, teams, organisations, and partners.

3. Data-Intuition Integration
Most leaders demand hard data when making critical decisions. In times of disruptive change, robust data rarely exist. Leaders must use any information they can obtain from any source inside and outside the company – but then complement that data by using their gut to round out the equation.

This links to my decision-making article which discusses the balance of rational data and gut feel.

4. Adaptive Planning
Leading disruptive innovation requires managing unsurpassed levels of uncertainty. Adaptive planning involves taking action to drive results, learning from them, and then modifying assumptions and approaches accordingly. Whether these ‘results’ are good or bad, they bring us closer to our breakthroughs since they result in new insights. These new insights shape our future strategies, plans, and actions, which are better aligned to the needs of the market.

For more on this, please see the TED video below.

5. Savoring Surprise
Disruptive innovation and change is a process chock full of surprise-failures, successes, unexpected technological advancements, competitive moves, customer feedback, political and regulatory shifts, and other unforeseen events. Most leaders assume surprises always should be avoided. But those who realise that surprises are an inevitable part of business (just like life) are best equipped to actually use surprise as a strategic tool – which makes them the most agile and fastest to respond to or capitalise on unforeseen events.

“All is flux, nothing stays the same.”
Heraclitus c. 535-475 BC

Become a Now-ist

In this TED talk, Joi Ito suggests you should become a now-ist rather than a futurist. Instead of planning everything in detail, you should work things out as you go, iterating in a more agile way.

“If you always do what you’ve always done, you’ll always get what you’ve always got.”
Henry Ford

Useful questions

Rather than rely on the past, use these questions to challenge your assumptions and keep your thinking fresh:

  • What innovations has our organisation developed over the past two years? What innovations have our major competitors developed in the same period? Are we leading, keeping pace with, or falling behind our competitors?
  • What are the most disruptive innovations in our industry? How can we better test or harness these emerging business models?
  • Globally, what can we learn from other industries that have been materially disrupted
  • Who are considered the brightest and most influential entrepreneurs in our industry? How do we forge stronger relationships with these people?
  • On an ongoing basis, how do we better sense and shape the trends in our industry?
  • Do we, as a board, have one or more directors with sufficient knowledge about digital disruption to understand how it is affecting our organisation and industry and how digital should be integrated into our organisation’s business strategy?
  • What is our organisation’s innovation culture? Are we willing to take innovation-related risks or is our organisation too tentative and, therefore, in danger of remaining stuck in the traditional ways that it operated in in the past? Do we
    encourage orthodoxies to be challenged?
  • Are we curious enough about our customers? Do we collect enough data often enough from our customers? Do we make good use of it?

Source: Deloitte Directors’ Alert 2014 Boardroom strategies in an era of disruptive change

Tackling disruptive change – what can you do, now?

Whether you are on the Board, a leader with an organisation, or an individual contributor I hope this inspires you to think disruptively!

  • How does the “Useful questions” section above stimulate your thinking for your area?
  • What unmet customer needs can you fill?
  • If you were leading the way (in your team, company, industry), what would you be doing? What value would you be providing? What would others admire about you?
  • Of the five competencies identified by Soren Kaplan, where are you strong and where do you want to develop? How will you play to your strengths and how will you address any gaps?
  • What future inspires you?
  • Who do you admire for their innovative approach, and what can you emulate?
  • If you were to truly challenge yourself, either in what you do, or how you approach your work, what would you stop or do differently?
  • If you were to commit to three things based on this topic of disruptive change, what will they be? Write them down in SMART (specific, measurable, attainable, relevant, time-bound) format.

Good luck! Let me know how you get on.

Next month, we look at how improvisation helps with innovation.

If you found this information useful, please click the social media buttons below, to share a link to this article with your network, and let me know if you’d like more details about this topic.