May 11, 2016 | Written by: Trevor Sanford
Categorized: Customer Experience
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It seems to me that nearly every blog, LinkedIn Pulse article or business journal that I read has stark warnings about how disruptive innovations will overtake whole industries and that established businesses have much to fear for the future because of disruption.
Just this morning I read a great article about the growth of Uber and there was one really interesting comment from Richard Howard who lead the start of Uber in London. When talking about the competition in the form of Addison Lee a licensed “private hire” operator that makes £90m yearly revenue Howard was worried that they would “get smart, spend £1m – which isn’t a lot of money for them – and make a really nice, seamless app that copied Uber’s. But they never did.”
This really got me thinking about how established businesses can effectively minimize the risk of disruption or market loss.
It’s interesting to note that game changing innovation doesn’t usually appear without warning. I don’t want to keep drawing on Uber as an example but as we’re already talking about taxis lets stick with them – The technology that is behind Uber was available to any taxi company.
So what held companies like Addison Lee back? More importantly, what can companies do to be able to realize the potential in these situations and act first to disrupt the disruption?
Many people talk about the need for a paradigm shift, personally I have always disliked this phrase. Sure you need to change the ways of working to create a new approach but essentially businesses should look at it as a much less dramatic change. It’s about understanding your marketplace, your customers and your competitors. Not just once but continually being curious and seeking out what is possible and aligning your business with these insights.
1. Assess your current strategy
It’s important to continually assess your current strategy even if it is working today. Improving and strengthening what you are doing well and looking for opportunities to introduce new technology.
2. The Crisis advantage
When an industry, local or even global economy is going through rough times like a recession then time and again it has been the companies that changed during the recession that have been in pole position during the recovery. As mentioned above if you are always assessing your strategy it’s a lot easier to make the right changes and not retrench. Status quo might weather the worst times but can really under cut your strategic position.
3. New ways of working and collaboration
Most businesses can count amongst their staff eager, bright, skilled and entrepreneurial thinkers who given the right platforms, methods and social business tools can bring a whole new culture of thought and innovation to a business. Just look at how we at IBM have driven our transformations from within.
4. Identify failure quickly
Fail fast, fail cheap, learn and move on. A business needs to know when something is unsuccessful and make a clear decision to stop learn and change. This is true for individual small team projects right up to overall business strategy. To really foster this culture a business needs to commit fully to points 1 & 3 above.
6. Look outside your industry
Often we expend too much effort looking at our own industries. Broadening your horizons by finding and learning what are the ingredients for success in other industries is by far the best way to bring new vision and ideas into the mix.
7. It’s not just about the product or service
Product innovation is great, but how many great new innovative products have lost their value due to tired old value chains surrounding them. Innovation needs to take place across the whole value chain from marketing to HR through sales, finance and customer services. Delivering innovation in all these domains really is a must to gain that competitive edge.
Finally, remember: the one area you really don’t want disruption is with your customers; they are looking for all the advantages disruption may bring to their daily lives in terms of ease, cost or experience but they don’t want their daily lives disrupted.
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