- When faced with industry-wide disruption, many businesses are spending more to keep up with competitors.
- Instead of playing catch-up, companies should seek to change the rules of the game.
- Alarm bells won’t motivate change; instead get key players to activate the urgency in the rest of the company.
Did ride-sharing apps kill the taxi business? Or did the taxi industry disrupt itself by consistently offering users a lousy experience at a high price and refusing to innovate?
These aren’t merely academic or semantic questions. Today, many companies find themselves competing with businesses whose primary purpose is not simply to take a small amount of market share, but to completely upend their industry and obliterate incumbents’ raisons d’être. And when confronted with such an existential threat, leaders spend too much time and budget trying to keep up with, or stay ahead of, their traditional competitors.
A tip: If you need your competitors to alert you that taking your customers for granted will crush your margins, it might be too late. Often, other companies’ faster adoption of emerging technology is a symptom of complacency within your organisation.
The leading indicators of complacency might be intangible, but they are usually significant. Is your star talent leaving for competition, or, even more telling, for entirely new industries? Are your costs of recruitment rising and internal recommendations dropping? Do people joke internally about how long it takes to get things done?
The best way to fight complacency and defend against disruption is to go on the offence. Instead of playing catch-up, companies should seek to change the rules of the game. They must identify and invest in the people who are always pushing for progress over perfection, and channel their passion and ambition in the service of disrupting their own business models. While doing so, leaders must create a high level of urgency, gain clarity, and express a strong vision.
It takes a special kind of person to speak up and ask if the business is stagnating. Think of your workplace like a chessboard: everybody has a role to play, and you can’t win a game with only knights. It’s healthy to have a mix of personality types. And one of those types is a team member who raises her hand, asks tough questions, and sparks productive debate.
Some people are naturally good at creating friction — they’re agitators, instigators, disruptors, and downright bothersome. Although they may not always be welcomed in many organisational cultures, they play a vital role when competitive landscapes shift. They’re the people who ask tomorrow’s questions, which tend to not to have answers.
Iconoclasts tend to make great experience and product officers. Because such leaders must work at the intersection of business, experience, and technology, it is imperative for them to look past the nuts and bolts of the current business, see the bigger picture and articulate a vision. Given the reins of authority, iconoclasts can work across silos to connect the best ideas and opportunities from all parts of the organisation.
Listening to your internal agitators might reveal the need for a big change in direction. The brutal truth is, disruption is holistic, endless, and inevitable. Beyond their business models, companies are going to have to alter their very DNA to stay relevant. That might mean changing behaviours so that people expect to operate in a state of flux. Doing so can be uncomfortable. But painting a vivid picture of the company’s tomorrow so that everybody in the organisation knows what’s what on the horizon can provide much-needed clarity.
Embarking upon a transformation means making a long-term commitment to help your business — by hurting it. Some of the most innovative companies in the world operate with little to no margin to win customers. Others unapologetically delay product releases because they will not compromise on quality. Still others roll out new experiences so rapidly their competitors can’t keep up. Risky business? In one sense. But with a clear vision and a plan to play the long game, companies can make an unconventional approach their standard operating procedure.
Self-disrupting businesses expect public scrutiny, and they power through bad quarters to come out leaner and meaner on the other side. That’s a modus operandi that is not easy to sell to shareholders, or internally. I was in a meeting recently in which someone complained: “Why is our business always changing?”
Building a sense
The business is always changing because it has to — for success, and for survival. For self-disruption to gain any traction, the executive team and the board need to agree that the task at hand is urgent, and to instill that sense of urgency in the organisation. When I work with business leaders and bring them all in the same room, we all become the architects of the future, embrace the leading indicators of change, and examine what is possible. It is only when we all come to the same conclusions and own the same solution that we can move forward with the speed and alignment needed to make tomorrow.
Urgency is key. Businesses don’t embark upon needed transformation when they think the threat level they are facing is DEFCON 2. They have to act as if they are at DEFCON 1, the highest level of alert, long before they are actually facing an existential threat. But ringing sirens in an attempt to spur people into action only gets you so far. Harnessing the power of iconoclasts and evangelists within the organisation in pursuit of a new vision is a necessary first step. And since the work can’t be done solely by your own team, leaders must take pains to bring along vendors, associates and customers at the inception of a transformation process.
A clear vision will ensure that transformations maintain their momentum. Here, too, focusing on the prospects of an internal transformation — and not simply looking ahead, to the side, or behind at competitors — functions as a powerful lens. It may help to play a form of Mad Libs and fill in the blanks:
(My company name) didn’t kill the (my industry) business.
We disrupted ourselves by (constructing an entirely differentiated experience).
Anybody can follow a path into the future by walking in the ruts that others have made. Today’s intrepid pioneers are those who carve out their own roads in unforgiving terrain.
This article originally appeared in PwC’s strategy+business.