How to stay relevant in a disruptive marketplace
Disruption can impact a business at any life-cycle stage
Conversations about business life cycles have been around for decades. If you majored in business or have an MBA, you’ve likely talked about the startup, growth, maturity and decline stages, and you can visualize the curve that represents this cycle.
In the past decade, there has been more discussion around disruption, which can impact a business at any life-cycle stage. You don’t have to be in maturity or decline before someone develops a new business model or way to more efficiently or cheaply satisfy the need you’re fulfilling.
I’ve written before about lessons we might draw from the likes of Schwinn, Kodak, Blockbuster and the music industry. We used to talk a lot about building a sustainable competitive advantage — which is still great if you can manage it — but now it’s important to focus more on innovation. Clayton Christensen, who recently passed away, wrote brilliantly about this in “The Innovator’s Dilemma” many years ago.
A fascinating thing about disruption and innovation is that the underlying need is often unchanged. People still ride bikes, take pictures, watch movies and listen to music, but how they do it has morphed to more convenient (not always cheaper) solutions.
A recent column in The Economist highlighted how the recording music industry has grown significantly in the past few years, but in a different channel — streaming. The industry as we knew it is almost dead, but the underlying market never went away, and there are great ways (now legal) to satisfy consumer needs.
I frequently run into CEOs who are being, or are about to be, disrupted; I appreciate how difficult that can be. Digging in never works. Ignoring it means you’ll end up with draconian measures as your only option.
Understanding the underlying need and asking how you might satisfy it more efficiently and perhaps less expensively is the only long-term option. In this situation, “stay the course” means “go down with the ship.”
How can you most easily be disrupted? How can you provide a more delightful product or service to your core customers — maybe at a lower price with a higher margin?